What is Medium Size Enterprises?

What is Medium Size Enterprises?

Over the last five decades, Small and Medium Enterprises (SME’s) has emerged as a vibrant and dynamic sector of the Indian Economy. These are complementary to large industries as auxiliary units and contributes to the socio-economic development of the country. Now, Medium Scale Enterprises are non-subsidiary firm which is made of enterprises that employ fewer than 250 employees. These enterprises emerge from the part of successful small businesses and plays an important role in the greater scope of employment opportunities at lower capital cost as compared to large businesses.

Medium-size enterprises plays a major role in Indian Economy as it gives a contribution to Domestic production, technology-oriented industries, Towards defence production, To develop appropriate indigenous technology, in domestic and export markets, training and skill development etc. As this discussion, it is cleared that medium enterprises is the one of a critical component of Indian Economy as blood is the main component in the human body.  Basically, Medium size enterprises creates a bridge between small and large corporations.

In terms of investment-

According to the provision of the Small and Medium Enterprises Development (MSMED) Act 2006, The Micro, Small and Medium Enterprises (MSME) are divided into two categories; Manufacturing Enterprises and Service Enterprises.

Enterprises Category Investment
Manufacturing Sector (Plant and Machinery) More than five crore rupees but less than 10 crore rupees.

 

Service Sector(Equipments) More than 2 crore rupees, but less than five crore rupees.

 

Objectives of Medium Size Enterprises:-

 The objectives of Medium size enterprises are:-

  • To help the rural and backward regions of the economy.
  • To solve the unemployment problems and create more employment opportunities.
  • To improve the standard of living of people.
  • To reduce the regional imbalances.
  • Move towards more equitable distribution of income and wealth.
  • To promote sub-contracting linkages among the small and micro and Enterprises.

How they work to increase economic growth:-

Particularly in the developing countries like India, Medium enterprises are the backbone of the nation’s economy. They played a significant role in increasing the employment opportunities as this adds over 1.3 millions jobs per year in India. It not only helps the rural and backward region for balancing the income and wealth but also help the large corporations in providing them auxiliary products. They have achieved significant advantages in economic growth such as increasing revenue growth and margins, improved market reach, access to new market, cost savings in marketing and communication, customer acquisition, in financing, infrastructure issues etc.

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