A Study on Effectiveness and Performance of Smes in Indian Society

In the upcoming ten years, the SME sector, one of the main drivers of the Indian economy, is anticipated to be crucial. Due to its capacity for financial inclusion and creation of significant employment prospects in both urban and rural areas, its expansion is seen as being vital. Due to their nature as small-scale investors, SMEs contribute to the protection of workers' rights and the social welfare of billions of people. Compared to main industries, the industry offers jobs with a significantly higher level of intensity. However, issues with finances, personnel availability and increased automation are jeopardizing the sector's productivity. Enhancing current technology and the support system requires evaluating the performance of SMEs. The lack of coordination between various performance measuring tools and bad management are two common problems in small and medium-sized enterprises. Due to quality concerns, the market is not yet ready to accept SMES in Delhi NCR's products, hence their output is mostly dependent on market availability. In this light, the researcher has made an effort to examine the impact of different factors of Operational, Management and Financial aspects of SMEs on its overall performance with the use of Factor Analysis and Structural Equation Modelling based on the views of 510 managers/owners of 384 SMEs spread over some places of Delhi NCR. The study identified significant impact of Operational, and Financial aspects on “overall performance of SMEs”. In this work, both inferential and experimental quantitative research methods were employed. The fundamental objective of the inferential method is for the researcher to create a data base for the topic under inquiry. It includes selecting a sample in order to extract information about the characteristics of the population. This generally refers to survey research, which involves researching a sample of the population and analysing the data to derive conclusions about the population's characteristics. In the sampling procedure, the population and sample are described in detail.