A Research on the Opportunities Available for SMEs in Tamil Nadu in Procuring Funds for their Business Operations
Uma Mageswari T1, Bhuvaneswari. G2

1Ms. Uma Mageswari T*, Research Scholar, Department of Management Studies, Sathyabama Institute of Science and Technology, Chennai-119, Tamil Nadu, India.
2Dr. Bhuvaneswari. G, Professor, Department of Management Studies, Sathyabama Institute of Science and Technology, Chennai-119, Tamil Nadu, India.

Manuscript received on October 16, 2019. | Revised Manuscript received on 27 October, 2019. | Manuscript published on November 10, 2019. | PP: 3291-3294 | Volume-9 Issue-1, November 2019. | Retrieval Number: A9173119119/2019©BEIESP | DOI: 10.35940/ijitee.A9173.119119
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Abstract: SME, synonym for the Small & Medium Scale Industries, considered as backbone for our Country for the simple reason that it contributes to the tune of 40% of the overall industrial production and of course 34% of national exports, to the Indian economy. The Indian Economy’s annual rate shall grow up to 7.8% in 2019 and 8 % in 2020. SMEs play an important and dynamic role in developing the Indian Economy. As per MSMED Act 2006, SMEs are classified as Manufacturing Enterprises according to their investments in plant as well as machinery and service enterprises according to their investments in equipment respectively. Any enterprise engaged in manufacturing of goods by employing plant and machinery comes under manufacturing enterprises category whereas enterprise which is engaged in rendering services comes under service enterprise. Manufacturing enterprises are categorized as micro firms, small firms and medium scale enterprises according to their investments in plant as well as machinery. Similarly, service enterprises are also classified as above based on investments in equipment. Since 2007, registered units under SME have risen to 217981 from 27209 units in Tamil Nadu offering employment opportunities to 1378544 as against 242855 during 2006-07. The SME industries are enjoying various subsidy schemes namely Generator subsidy, Capital subsidy, LT power tariff subsidy, back ended interest subsidy, etc. As per the Govt. of Tamil Nadu notification, there is a credit flow of 46.57% exclusively to MSME industries out of the total disbursements by the banks during the period between April 2017 and December 2017. Their role in Indian Economy is very vital as they provide huge employment opportunities. In fact, India is a country facing unemployment problems for which SME industries have become a great boon as they provide 9 times of employment opportunities in comparison to large industries. SMEs have all merits on their side like adding significant GDP in the manufacturing sector, mitigating imbalance in balance of payment problem in case of exports, increasing the capable entrepreneurs, helping equal distribution of income and wealth etc., However, on the other side, lack of adequate finance is a major issue for SMEs for various reasons attributed like lack of cash flow consistency, inadequate collaterals, non-availability of timely and sufficient credit, huge credit costs, restricted access to equity Capital etc. This article is trying to analyze the blockage of getting adequate finance for SMEs since its inception.
Keywords: SME; MSMED, Cash flow Adequacy, Indian Economy,
Scope of the Article: e-business