Market regulator Securities and Exchange Board of India (Sebi) would come up with guidelines for setting up stock exchanges exclusively for small and medium firms soon.
"Sebi is working on it. The norms are being finalised and would be released soon," Finance Ministry sources said.
The market regulator has already floated the concept for setting up the exchange which will enable SMEs to raise capital from the primary market.
The exchange will help small enterprises that could not fulfil the trading requirements of the BSE and the NSE, raise capital, sources said.
Micro, Small and Medium Enterprises (MSME) Secretary Dinesh Rai had earlier said there could be more than one exchange for the SMEs.
The BSE, NSE and the new entrant MCX Stock Exchange (MCX-SX) have shown interest in setting up a SME exchange.
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There are over 2.91 crore units in MSME that accounts for 40 per cent of the industrial output of the country.
The Prime Minister's Office has set up a special Task Force headed by the Principle Secretary T K A Nair to look into the problems of SME sector and credit flow to the sector employing over 6 crore people.
According to the discussion paper on developing a market for Small and Medium Enterprises in India floated by Sebi last year, the contribution of SMEs in the development of Indian economy has been significant, both in terms of contribution to GDP and creation of employment opportunities.
With the Indian economy growing at more than 9 per cent on an average in the last few years and size of the economy crossing the $1 trillion mark, the need of SMEs to raise capital is becoming increasingly critical, it noted.
Efforts have already been made in the past for catering to the needs of small companies, it said, adding, towards this end, OTCEI was set up in 1989 and the INDO NEXT Platform of the BSE was launched in 2005.
However, both these experiments failed to achieve the desired results, it said.