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Running a magazine concentrating on issues of small and medium enterprises and managing with limited resources is a like living life on the edge. In this rush of meeting deadlines,...

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Apr 2012

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Features

Self Empowerment Must for SMEs

Bhavesh Kothari
Jan 2011

Small and Medium Enterprises (SME's) play a pivotal role in any nations' economy since SMEs constitute over 75% -80% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for major share of industrial production and exports and thus enabling to achieve the objective of inclusive growth. And this is so true for a dynamic economy and country like India where there are estimated 30 million MSME's spread everywhere and anywhere across the length and breadth of the country and which accounts for 45 per cent of India's manufacturing, 40 per cent of industrial output and exports, 17 per cent of the Gross Domestic Product (GDP), provides employment to 60 million people and has a product range of 8,000.

The government currently is chalking out a blueprint and creating census report which will enable the identification of the needs of the SME's in India as well as strengthen the activities in terms of credit flow and providing technical assistance to this sector. This will enable to create policies and quick action in terms of implementations of policy initiatives specific to individual sectors to help them.

But with the global turmoil of the financial crisis which shook the foundations of many economies worldwide, some of them which are still struggling to get back on their foot, should SME's wait and watch or should they start proactively looking for building a strong foundation which can withstand the storm of times? Should they not look for innovation as a tool and build sustainable business models for growth? Should they keep depending on the country's government for support and assistance in terms of subsidy schemes and financial assistances?

At the same time it is also important for the Government to start working out a more concrete plan and action cluster development initiatives across the country which then can be handed over to the industry for its further growth and development. Although there are various Industry Association's and Bodies, Institutions, Agencies across the length and breadth of the country working towards the objective of assisting SME's, but with their own strategies and agendas, a more focused approach would work wonders provided they all join hands and focus their energies on one single objective of inclusive growth. These industry bodies, institutions, agencies can together channelise the promotional and developmental efforts at grass root level, ensuring the growth and competitive advantage for this sector. Also the respective state governments should work out a strategic plan of action in sync with the centre which can be implemented nationwide for the betterment of the SME's.

Various innovative schemes are worked out by some of the state governments which can surely become building blocks for other states as well, provided they are implemented and executed effectively. A classical example is the recent announcement by the Gujarat state government which has launched a fund with a corpus of around Rs 60 crores to support Innovation among Small and Medium Enterprises in Gujarat which in turn will create 3 lakh employment opportunities in the state in the coming 3 years. These funds will enable SME's not only to innovate but also to focus on quality, manufacturing excellence and effective marketing their products and services. It's the proactiveness of the State governments towards the development of such innovative schemes, which will make a difference and contribute to the overall growth of the Economy.

Its also high time our SME's move away from the government assistance and subsidy driven mindset and start focusing on building more sustainable business models which will empower them to grow faster and stronger. They should start building a community so strong where all work in sync with each other to grow and prosper. The industry itself should take ownership and build partnerships to create clusters and initiate the development of these clusters by building proper infrastructure to run effective cluster development programs. Leadership is about building a community of leaders at all levels of society and hence a more unified and professional approach is the need of the hour from the SME sector to build a stronger community.

Success is a Tribute which life pays to Excellence!!!

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