Where is RETAIL in the SME sector in India?

In India the Small and Medium Enterprises (SME), also known as “Town and Village Enterprises” in the manufacturing and service sectors have been considered to be quite significant in their contribution to the GDP growth of the country. The Micro Small and Medium Enterprises Development Act (MSMED Act) was enacted in India in 2006 and it facilitates the promotion of SMEs in India. The act embraces any commercial activity permissible under law i.e. any type of manufacturing, processing or industrial activity or trading or allied operations to fall under the SME category. Besides manufacturing, a plethora of service activities like Medical /Legal transcription activities, Call Centers, Event Development and Animation, Video, Filmmaking, Marketing Consultancy, Equipment Rental and Leasing. Laundry, X-rays/Pathology, Tailoring, Studios, Cable TV Network, etc. get due benefits consequent to the categorization as SME in India. For a common understanding of the enterprises, the following classification parameters are provided in the act to differentiate and define each category of enterprise:

Enterprise	Manufacturing	Services
Micro Enterprise	Not to Exceed Rs. 25 Lakhs.	Not to Exceed Rs. 10 Lakhs.
Small Enterprise	More than Rs.25 lakhs but does not exceed Rs. 5 Crores.	More than Rs.10 lakhs but does not exceed Rs. 2 Crores.
Medium Enterprise	More than Rs.5 Crore Rupees but does not exceed Rs. 10 Crore.	More than Rs. 2 Crore but does not exceed Rs. 5 Crores.

Banks offer assistance to the growth of SMEs in India. Further banks came up with specific policies to fund and facilitate SME through single window dispensation, quick decision with least turnaround time through specially constituted MSME Cells, and above all banks prioritized cluster based schemes for funding SMEs with better service.

When it comes to the retail sector, it is yet traditional and micro and small retailers are not even included in the act. Many units involved in the manufacturing of private labels that help retailers are included though. The SME sector in retail is not even taken cognizance of by anyone yet for facilitating its growth. Often we have spoken in seminars and conferences about supporting the growth of traditional retailing in India and about trying our best to modernize traditional retailing in India. We have not done anything yet.

We have many recognition awards given away by seminar and conference organizers in India like Images Retail Awards, ET Retail Awards, etc., and such awards are given repeatedly to just a few retailers to encourage them in the large, organized retail sector of the country. Progressive and growing retailers are there in the SME sector in India in multitudes and if we can categorize them for attaining recognition under the act literally, there will be no limit to their exponential growth in a modernized manner! And recognizing them by acknowledging their achievements will go a long way to motivate them further.

- Dr. Gibson G. Vedamani