''Govt needs to change their outlook on SMEs''

KOLKATA: Small and Medium Scale Enterprises (SMEs) constitute a major part of the industrial activity in most of the economies, irrespective of the level of economic development attained.

In India, SMEs form around 80% of the total number of industrial enterprises and produce a wide variety of products ranging from the very basic to the highly sophisticated products. The SMEs in most countries are “totally unaware as to how much they contribute to the GDP.”

Speaking at a seminar on “Access to Equity and Credit for SMEs “, Dr G D Gautama, Principal Secretary, Department of Cottage and Small Industry, GoWB stressed that the entrepreneurs should focus on “attitude and procedures” as they are the two most important things in business today.

Acknowledging the tardiness and red tapism of the bureaucratic processes, Dr Gautama said that the government also needs to change their outlook. The Principal Secretary was emphatic that the banks are “not against new business” but they do expect that a project should be viable and parameters should not slip so that they get their money back in time.

Dr Gautama also said that most of the businesses are not aware of the tools available to them and called on the government, industry, industry associations, and academe to gel together as a team and work towards building a huge corpus of resources for SMEs. He called on the SMEs to hone adaptability skills and competitiveness and increase efficiency and productivity to survive in the age of globalisation.

Suneel Parasnis, Country Director, World Resources Institute in his address said that in a developing country like India there are huge gaps between funds and projects. Parasnis gave outlines of New Ventures India which is working in third world countries to connect local informal economy with global formal economy. Mr Parasnis said that the SMEs do not have the idea of sustainability. He emphasized that “mentoring” is essential for SMEs for building their brand equity and increasing their levels of competitiveness.

Speaking about the Industry Perspective, Ashish Jhunjhunwala, CMD, Ramsarup Industries said that there is a persistent feeling of “suspicion” from the bankers towards the SMEs. Jhunjhunwala also asked entrepreneurs to sharpen their competitive edge and upgrade skills and technology and that formation of clusters would help SMEs achieve this. As far as the banks and financial institutions are concerned, Jhunjhunwala opined that the SME issues and their areas of concerns should be looked into in a more holistic manner; the banks should be more sensitive to the SMEs needs and have a more coordinated approach. Banks, according to him, should also have dedicated SME services.

© CIOL Bureau