Industrialization is an effective means for solving the problems of economic and social progress in developing countries of the world. The development of manufacturing has been concomitant with these countries spectacular economic progress and rise in levels of living.

The SME sector has acquired an outstanding contribution in the socio-economic development of the country. The damaging factors in the development of this sector are low capital base, accessibility of technology, credit policy, in consistent business services, quality human resources, low market awareness and infrastructural deficiency. The SME sectors are growth engine for economy in present scenario of globalization process.

The Aim of this paper is to examine various issues in context of Indian economic condition. Entrepreneurship is indispensable to accelerate the industrial growth. Small and Medium enterprises are an effective means for the development of entrepreneurship. This sector is a only solution to the problems of poverty, insecurity, unemployment, over population he modern world. This article attempted at highlighting the significance SMEs in economic development of India. It identifies contribution of SMEs in GDP growth.