'SMEs' to add 22% to GDP by 2012'

The contribution of small and medium enterprises (SMEs) to India's Gross Domestic Product (GDP) is likely to increase up to 22 per cent by 2012, from about 17 per cent at present, on account of an increase in production due to technological upgradation, says an industry chamber survey.

"SMEs' contribution to GDP is projected to go up by a minimum of 5 per cent and touch 22 per cent by 2012, since over 60 per cent of them are aggressively upgrading themselves technologically," the Assocham survey said.

It added the technology modernisation would not only help in increasing production but also bring down the input costs.

The study said liberalisation and deregulation in the industry would also contribute to the sector's growth, adding that the sector which has grown at the rate of 35 per cent in the last two years, is likely to register 40 per cent growth in the next five years.

Further, the study said the sector contributes 40 per cent to the country's exports and with the help of modernised technology its share would increase to over 44 per cent.

"With technology modernisation, the share of these units in the country's exports would also surge to over 44 per cent in the next five years, from about 40 per cent at present," Assocham Secretary General D S Rawat said.

Numbering about 3.2 million, there are various hurdles in the growth of these units as they face problems like non-availability of credit facilities and high interest rates, it added.