Small - medium enterprises have always been a vital part
of the economy of major countries across the globe. This segment has played a
crucial role in the GDP growth of all these countries.
India, being one of the major developing economies, is giving huge priority to
this sector, by way of lending low-interest loans and providing various
entrepreneurship schemes etc. But is that enough? Is the government serious
enough about this burgeoning sector, which is the backbone of India's
economy? In the other parts of the world, especially in the Western and
European countries, there are innumerable SMEs that are being run successfully,
as they are getting adequate support from their respective governments. And
they don't mind risking their money or property to invest in what they think is
right. They are sure that if something bad happens to their business, the
government will stand by them and provide support to put it back on track. But
the Indian scenario is entirely different.
The Small and medium enterprises havein the country are
facing innumerable issues, right from access to funds and technology to lack of
knowledge and unavailability of qualified staff. Despite the number of
programmes and schemes announced for the upliftment of this sector, the
benefits of do not reach the right beneficiaries. In an interview with CIOL
sometime ago, Mr,S.M.Jamkhandi, director, MSME Development Institute, Bangalore,
had said, “Though number of schemes have been announced for the Small and
medium enterprises havesector, the benefits hardly reach the intended target,
as there is a is lack of definite steps in the direction of creating awareness
about these programmes.” Also, when we contacted some small business owners in
Bangalore in the backdrop of the presentation of the Union Budget for financial
year 2012-13, despite the budget giving some hope to them, we found that they
expected the government to give more importance to the sector.
What are the major challenges faced by our SME sector?
Lack of finance: Finance is key factor in starting a
venture. Though most lenders – including new generation banks – in our country
have turned their focus on this sector, many Small and medium enterprises haveare
not aware of various loan schemes provided by these banks. Since majority of
SMEs are located in rural areas, they do not have access to developments
happening in the banking sector. The State Bank of India recently revised its
interest rates on Small and medium enterprises haveloans, reducing it by 2 per
cent. The bank has already launched a collateral-free loan scheme for SMEs. So,
if we create awareness about various schemes provided by banks and other
government-backed financial institutions, like the SIDBI, that can serve as a
huge boost for the sector. Lack of infrastructure: Lack of adequate
Infrastructure is another headache SMEs in India are facing.
Irregular power and water supply, bad road and railway
connectivity are some of the factors that are hampering the growth of Small and
medium enterprises havein India. If the government is serious about the growth
of Small and medium enterprises haveit has to take all necessary steps to
provide better infrastructure to these small and medium industries. Lack of
Technology: Technology, a crucial component of Small and medium enterprises hav,
is what decides the success of an Small and medium enterprises havein this era
of IT revolution. There are umpteen number of IT and software solutions
available in the market offered by major players like IBM, Microsoft, HP, SAP
and Cisco, etc. If you do not make the most of these solutions, you might be
chucked out of the market by your competitors.
Many of these IT solutions are easy to deploy and highly
cost-effective. There are cloud solutions, HR management tools, unified
communications tools, supply chain management software, ERP, etc at your
doorstep. What you need to do is take the right step in this direction. This
can help reduce your cost to a very large extent. Lack of marketing assistance:
Many Small and medium enterprises havein the country do not have the expertise
on how to go to market with a product or service. The MSME ministry has various
schemes for Small and medium enterprises havethat want to market their products
in the country and foreign markets. The government provides financial aids to
those who are looking at major global markets to sell their products. “A major
problem is that many Small and medium enterprises haveare not focusing on
global markets, as they know that they can sell their products or services here
itself, since ours is a very huge market. This is a serious issue. We have to
look at the global markets. The government is there for your assistance, both
in terms of providing finance and logistics. Moreover, you need to innovate
your products so that they get better acceptance in foreign countries. This
will help you build your own brand name,” Jamkhandi pointed out.
Source: CIOL World
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