SME Full Form - Small and Medium Enterprise

What is the full form of SME?

The full form of SME is small and medium-sized enterprises. The SMEs have a limited number of workers and the investments in assets such as the cost of plant and equipment fall below a certain amount. SMEs play an extremely crucial part in the development and growth of the industrial economy of the country. It also serves to motivate citizens in many sectors of the economy to boost competitiveness and innovation.

Types of SMEs

Under section 7 of the 2006 Micro, Small & Medium Enterprises Creation Act, the SME definition in India is determined by the amount of investment according to the sectors to which it belongs.

In Case of Industrial Enterprises

  • Micro Enterprises – Expenditure in the plant & equipment doesn’t cross 25 lakh Rs.
  • Small Enterprises – Plant and equipment expenditure amounts to be more than 25 lakh Rs, but it does not exceed five crore Rs.
  • Medium Enterprises – Revenue in the plant and equipment is more than five crore Rs but does not cross ten crore Rs.

In the case of Service Companies

  • Micro Enterprises – Spending in tools and equipment should not cross 10 lakh Rs.
  • Small Enterprises – Spending on tools and equipment is more than 10 Lakh Rs but does not cross two crore Rs.
  • Medium Enterprises – Spending on tools and equipment is more than two crore Rs but does not reach five crore Rs.


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