It is time for the Indian small and medium enterprises (SMEs) to opt
for innovation to enhance competitiveness globally as they are facing
various problems such as inadequate infrastructure, insufficient risk
capital and high interest rates, said A Ramesh Kumar, chairman, SME
Chamber of India (Northern Region) in an exclusive interview with SME
News.
Among various challenges witnessed by SMEs, getting timely funding is a big problem. The small units mostly depend on banks for funds as private equity funding has not gained momentum in India.
What is the role that your Federation aims to play for the growth of the Indian SME sector?
A Ramesh Kumar: The SME chamber of India is a progressive platform for promoting and supporting the SME sector in India. The objective is to create an ecosystem for making the Indian SMEs innovative and globally competitive. The chamber organises several seminars, conferences, workshops, training projects, which creates growth opportunities for industry in various areas such as networking and knowledge migration. The chamber also plays active role in policy formulation in SME sector.
What are the current projects being undertaken by your Federation?
A Ramesh Kumar: SME chamber has lined up several initiatives. Some of the important forthcoming events are - SME National Banking Conclave, SME IT summit, SME Finance and investment summit, Young Entrepreneurs Award, Women Entrepreneurship Summit etc. The SME Chamber of India in association with the university of Wales and Asia Pragati Capfin Pvt Ltd launched a Wales-India SME Innovation Project, under which an open innovation centre and knowledge portal will be created in Mumbai for SMEs in India. Some prominent international activities are Ukraine Summit, World SME Ukraine summit, MBI Business summit, India-Europe business’s summit. The chamber also proposes to send business delegations to South Korea, UK and Wales etc. This will help in developing business relationship between SMEs of India and other foreign countries.
Can you throw some light on the current conditions of the SME sector in the state?
A Ramesh Kumar: While SMEs across the country are gearing up to face local and global competition, they are handicapped in various areas such as inadequate infrastructure, inadequate risk capital and high interest rates.
Are the exports placed aptly for the SMEs in India?
A Ramesh Kumar: SMEs are performing well in exports, contributing 40% of country’s out bound trade. Going forward to maintain this level, the SMEs have to become more innovative to remain globally competitive. Also, infrastructure inadequacy needs to be addressed.
Do you think the domestic market is boosting the growth of SME sector?
A Ramesh Kumar:High inflation has definitely affected domestic rates of SMEs. High interest rate has also affected their margins. Although, it is a difficult scenario to cope with, but over the medium term large domestic market will continue to support the demand for SME products.
What are the main challenges faced by the Indian SMEs?
A Ramesh Kumar: Getting timely funding remains the biggest challenge. Indian SMEs mostly depend on banks for funds while risk capital (equity) funding is yet to pick up in India. Some recent initiatives of government for increasing venture capital funding will be useful in future years. Besides funding, other challenges are collections of receivables, technological up gradation, trained man power, skill development and marketing etc.
Do you feel that government policies (both Centre and state) are working in favour of the MSMEs?
A Ramesh Kumar: I think there is a reasonably good appreciation at the central government level regarding problems faced by the SMEs. Some initiatives like Factoring Bill, SIDBI bill, India Opportunities Venture Capital funds etc are noteworthy. There are also ongoing dialogues between government and industry representatives. However, there is much to be done at implementation level. Some state governments have been able to put in place policies to encourage SMEs. However this cannot be said about all the states. While all parties conceptually support SMEs, the implementation of measures, reduction of red tape and provision of infrastructure is the differentiator.
Skill development has been observed as a key issue at the moment for SMEs. How do you view it and what are the solutions?
A Ramesh Kumar: As India aims to become a knowledge economy, there will be big need for skill development. Centre has started some initiatives for skill Development Corporation. Here the Industry chambers can also make excellent contribution. In fact, India needs to develop a knowledge network involving industries, government, industry chambers and academicians, which will ensure supply of skilled persons to SMEs.
Can you throw some light on the ICT (information and communication technology) used by SMEs?
A Ramesh Kumar: Many SMEs are using ICT. The SME chamber conducts many programmes to build awareness regarding ICT. We are planning to conduct a workshop in cloud competing for SMEs in September.
How do you think the FTP policy will help the Indian SME sector?
A Ramesh Kumar: FTP policy, which was formulated in 2009, needs to be relooked when new policy comes up in 2014. Wild fluctuation in rates is a big challenge for SMEs.
Kindly share the roadmap of your Federation for this fiscal.
A Ramesh Kumar: We have a very active schedule. We have many initiatives which will continue to be implemented. We have started a new research initiative in Innovation in association with UK Govt, Welsh universities. We hope this will help in making our SMEs more innovative and competitive.
S&P lowered the outlook for India to negative and also Fitch downgraded India's credit rating from stable to negative. Do you think it will affect Indian SMEs?
Among various challenges witnessed by SMEs, getting timely funding is a big problem. The small units mostly depend on banks for funds as private equity funding has not gained momentum in India.
What is the role that your Federation aims to play for the growth of the Indian SME sector?
A Ramesh Kumar: The SME chamber of India is a progressive platform for promoting and supporting the SME sector in India. The objective is to create an ecosystem for making the Indian SMEs innovative and globally competitive. The chamber organises several seminars, conferences, workshops, training projects, which creates growth opportunities for industry in various areas such as networking and knowledge migration. The chamber also plays active role in policy formulation in SME sector.
What are the current projects being undertaken by your Federation?
A Ramesh Kumar: SME chamber has lined up several initiatives. Some of the important forthcoming events are - SME National Banking Conclave, SME IT summit, SME Finance and investment summit, Young Entrepreneurs Award, Women Entrepreneurship Summit etc. The SME Chamber of India in association with the university of Wales and Asia Pragati Capfin Pvt Ltd launched a Wales-India SME Innovation Project, under which an open innovation centre and knowledge portal will be created in Mumbai for SMEs in India. Some prominent international activities are Ukraine Summit, World SME Ukraine summit, MBI Business summit, India-Europe business’s summit. The chamber also proposes to send business delegations to South Korea, UK and Wales etc. This will help in developing business relationship between SMEs of India and other foreign countries.
Can you throw some light on the current conditions of the SME sector in the state?
A Ramesh Kumar: While SMEs across the country are gearing up to face local and global competition, they are handicapped in various areas such as inadequate infrastructure, inadequate risk capital and high interest rates.
Are the exports placed aptly for the SMEs in India?
A Ramesh Kumar: SMEs are performing well in exports, contributing 40% of country’s out bound trade. Going forward to maintain this level, the SMEs have to become more innovative to remain globally competitive. Also, infrastructure inadequacy needs to be addressed.
Do you think the domestic market is boosting the growth of SME sector?
A Ramesh Kumar:High inflation has definitely affected domestic rates of SMEs. High interest rate has also affected their margins. Although, it is a difficult scenario to cope with, but over the medium term large domestic market will continue to support the demand for SME products.
What are the main challenges faced by the Indian SMEs?
A Ramesh Kumar: Getting timely funding remains the biggest challenge. Indian SMEs mostly depend on banks for funds while risk capital (equity) funding is yet to pick up in India. Some recent initiatives of government for increasing venture capital funding will be useful in future years. Besides funding, other challenges are collections of receivables, technological up gradation, trained man power, skill development and marketing etc.
Do you feel that government policies (both Centre and state) are working in favour of the MSMEs?
A Ramesh Kumar: I think there is a reasonably good appreciation at the central government level regarding problems faced by the SMEs. Some initiatives like Factoring Bill, SIDBI bill, India Opportunities Venture Capital funds etc are noteworthy. There are also ongoing dialogues between government and industry representatives. However, there is much to be done at implementation level. Some state governments have been able to put in place policies to encourage SMEs. However this cannot be said about all the states. While all parties conceptually support SMEs, the implementation of measures, reduction of red tape and provision of infrastructure is the differentiator.
Skill development has been observed as a key issue at the moment for SMEs. How do you view it and what are the solutions?
A Ramesh Kumar: As India aims to become a knowledge economy, there will be big need for skill development. Centre has started some initiatives for skill Development Corporation. Here the Industry chambers can also make excellent contribution. In fact, India needs to develop a knowledge network involving industries, government, industry chambers and academicians, which will ensure supply of skilled persons to SMEs.
Can you throw some light on the ICT (information and communication technology) used by SMEs?
A Ramesh Kumar: Many SMEs are using ICT. The SME chamber conducts many programmes to build awareness regarding ICT. We are planning to conduct a workshop in cloud competing for SMEs in September.
How do you think the FTP policy will help the Indian SME sector?
A Ramesh Kumar: FTP policy, which was formulated in 2009, needs to be relooked when new policy comes up in 2014. Wild fluctuation in rates is a big challenge for SMEs.
Kindly share the roadmap of your Federation for this fiscal.
A Ramesh Kumar: We have a very active schedule. We have many initiatives which will continue to be implemented. We have started a new research initiative in Innovation in association with UK Govt, Welsh universities. We hope this will help in making our SMEs more innovative and competitive.
S&P lowered the outlook for India to negative and also Fitch downgraded India's credit rating from stable to negative. Do you think it will affect Indian SMEs?
A Ramesh Kumar: While outlooks have been adversely affected
India still remains investment grade, although the negative outlook will
increase cost of external funds. This has no effect on SMSs in a big
way. These ratings should be taken as working notes and necessary
policies to be formulated to address concerns. Equity investment needs
to be accelerated. Many projects which have been started need timely
implementation. It will create new jobs and create a positive atmosphere
which will attract new investment. All these will lead to outlook
upgradation.
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