What is the full form of SME?
SME Full Form is Small and medium-sized businesses. The number of employees and investments in assets, such as the cost of plant and equipment, are under a certain threshold for SMEs. The role of small and medium-sized enterprises (SMEs) in the growth and development of the nation’s industrial economy is crucial. It also serves to encourage citizens in a variety of economic sectors to increase innovation and competitiveness.
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Types of SMEs
According to Section 7 of the Micro, Small, and Medium Enterprises Creation Act of 2006, the definition of an SME in India is based on the amount of investment and the sector to which it belongs.
Case of Industrial Enterprises
- Micro Enterprises – Investment in plant and equipment does not exceed 25 lakh rupees.
- Small Enterprises – Plant and equipment expenditures must exceed 25 lakh rupees but not exceed five crore rupees.
- Medium-Enterprises – Revenue from plant and equipment is greater than five crore rupees but less than ten crore rupees.
Case of Service Companies
- Micro-Enterprises – Equipment and tool expenditures should not exceed 10 lakh rupees.
- Small Businesses – Equipment and tool expenditures exceed 10 lakh rupees but do not exceed two crore rupees.
- Medium-Sized Businesses – Equipment and tool expenditures exceed two crore rupees but do not exceed five crore rupees.
