Continued policy paralysis can hit growth prospects of Indian SMEs, says Niranjan Hiranandani from Indian Merchants' Chamber

Strong infrastructural constraints in India have hit the SMEs as they have not been able to perform as per their full potential causing higher transaction costs and lowered competency, said Niranjan Hiranandani, president of Indian Merchants' Chamber (IMC) while talking exclusively to SME News. Moreover, various bottlenecks, such as insufficient capital, investment and also policy paralysis, are also impacting the profitability of the Indian SMEs.

What is the role that Indian Merchants' Chamber (IMC) aims to play in Indian SME sector? Niranjan Hiranandani: IMC’s role is to facilitate promotion of business in general by advocating the cause of trade, commerce and industry in general. Since SME is an important segment of the economy and a large chunk of the IMC members is from SME businesses, the sector becomes a focus for IMC. IMC plans to systematically identify the issues faced by SMEs and to explain to the sector how to equip itself to make the most of the changing world. IMC seeks to develop a holistic policy approach towards building sustainable capacities in the SME sector.

What are the current projects being undertaken by IMC? Niranjan Hiranandani: The projects which are being undertaken by IMC this year include: - India Calling China: IMC’s annual flagship event of business delegation in other country. - Fusion: Entertainment Galore - This is a new initiative by IMC. It is a conference covering sports, media and entertainment industries. Mumbai Development: A seminar involving leaders of political parties giving their vision about holistic development of Mumbai. A compilation of opinions will be published later. - 7th Finance & Banking Conference: IMC annual conference featuring current trends and issues in banking sector. - RuDICON (Rural Energy Security Through Distributed Clean Power Generation): This will be for India to emerge as future economic power house on the global firmament with adequate availability of energy to meet power shortages. - BRICS Cities Conference: A conference where a chamber and municipal authorities in each city of the BRIC countries are partners. It is going to be held in Mumbai this year in November 2012 hosted by Mumbai Municipal Corporation. - Skill Development Centres: IMC acts as a catalyst and facilitator in setting up of skill development centers. The first one was opened in Navi Mumbai recently. The aim is to facilitate establishment of 100 such centers for diverse skill streams. - Economic Research & Training Foundation (ERTF): Water, Education and Healthcare: IMC-ERTF is the research wing of the Indian Merchants’ Chamber used to promote applied Economic Research and skill dissemination through various training programmes. This year ERTF department will be undertaking research in the following areas. a) Water: ERTF is conducting research study on Investment Opportunities in India’s water sector along with RIRA. In this publication we are focusing on assessment to understand the water footprint and to identify the gaps in water resources management. We are illustrating on activities for creating a host of new investment opportunities for investors. Amongst other, this book will also capture review of the current regulatory policy, pricing mechanism, demand and supply usage of water, pollution, water treatment, infrastructure, case studies on best practices, investing opportunities across assets classes, evaluation of financing mechanisms and lastly recommendations for an enabling framework for investing in water project. b) Education: It is believed that India's economic growth is not generating enough jobs or livelihood opportunities. At the same time, many sectors face manpower shortages. To address both, we need to improve our education and training systems and create efficient and accessible labor markets for all skill categories; and encourage the faster growth of small and micro enterprises. To improve the education system it is necessary to identify the skill set, skill gaps vis-à-vis employer needs, understand the perception/attitude of the employers that will enhance the employability and even there should be proper demarcation of the role of academia, industries and policy makers in skill enhancement activities. Only reforms in the education sector can play a role of game changer for strengthening and sustaining Indian economy in the near future. c) Healthcare: Healthcare in India should raise the level of physical, economic and social access to balanced diet, clean drinking water, safe environment, and health care (preventive and curative) for every individual. For this both private and public health care organisations should look forward for effective partnerships for improving safety and outcomes of the common man by enhancing the healthcare infrastructure like more hospitals and dispensaries to be set up for the common man at affordable prices. - Arbitration & Mediation: IMC renders the services of institutional arbitration and also mediation for resolving commercial disputes expeditiously and economically. - Student’s Forum: Bi-monthly Seminars for students with eminent speakers needs to take place. The mentorship for students where each one of them will be placed for a day with a successful leader in the area of student’s study.

How do you think that the Indian SMEs are performing in the present global scenario? Niranjan Hiranandani: Their performance is mixed. On the one hand, competition brought about by the globalisation of the economy leads to an improvement in the quality of operations and products and services offered by the sector. On the other hand, there are tremendous infrastructural constraints in India leading to higher transaction costs and reduced competency, due to which our SME sector is not able to perform at its full potential.

What are the key challenges faced by the Indian SME sector? Niranjan Hiranandani: Our labour laws are terribly archaic, and until they are modernised, we cannot hope to compete internationally in manufacturing, particularly commodity manufacturing, which so many SMEs are engaged in. There is also an issue of SMEs not having access to adequate finance for their routine operations and growth. Introduction of new technology and technology upgradation are yet another challenge being faced by the SMEs. In the absence of these issues being not addressed adequately, SMEs are not able to define their core competencies and chalk out a competitive role for them.

Do you feel that government policies (both Centre and state) are working in favour of the SMEs? Are they assisting these companies in alleviating the pertinent issues? Niranjan Hiranandani: By and large, government policies are directed to assist the working of SMEs. However, more needs to be done. A major reason for it could be that the SME sector is mostly unorganised. Also, government does not seem serious about implementing labour reforms in the country, hence the viability of SME businesses in India is jeopardised.

What is the outlook for the SME sector in this year? Niranjan Hiranandani: The dependency of the SMEs on government policy is huge. If the policy paralysis continues, then the SME sector will continue to be hit. High interest rates prevailing in the economy are also deterrent to the growth of the SME sector.

Analysts feel that technology adoption by SMEs and marketing are problems for SMEs. How far do you think it is correct? Niranjan Hiranandani: India’s inadequate infrastructure and uncertain power situation (shortage in supplies and unscheduled power cuts) have led to a very limited technology adoption by SMEs. As far as marketing is concerned, it needs to originate some new ideas, which could be executed pragmatically, and be performed with the goal of achieving a healthy return on investment. It is debatable whether all this is really happening in India.

Recently, Indian government displayed its keenness to change SME definition to facilitate investments from Swedish furniture giant IKEA. What's your take on it? Niranjan Hiranandani: This kind of a move displays shortsightedness and has a touch of favoritism to it. Rather than changing definitions to benefit an individual company, it would have been better if the government had focused on infrastructure development, dispelling the notion of policy paralysis, beefing up the quality of governance, and bringing about a business-friendly environment all over the country.

Fitch downgraded the outlook for the domestic retail sector to "negative" from "stable". In the past other global agencies cut the outlook for India to negative. Do you think it will affect Indian MSMEs? Niranjan Hiranandani: It will affect Indian MSMEs to the extent that it will be harder for them to raise funds abroad. The downgrading of the country’s credit rating by international global agencies does not bode well for the domestic MSME sector.

RBI's move to leave rates unchanged for the second consecutive policy review has been criticised by India Inc. How do you think it will impact the growth of SMEs? Niranjan Hiranandani: Economic activity and investment are adversely affected in a high interest rate scenario. There is no doubt that higher interest rates are going to hurt the bottomline of SMEs, thus hampering their growth prospects. However RBI has expanded the availability of credit and hence there will be a covering of interest rates in future.

Kindly share the roadmap of IMC for the ongoing financial year 2012-13. Niranjan Hiranandani: The forthcoming events planned this year by IMC’s MSME committee are: - SMEs: Alternate Funding strategy - Workshop on ‘Skill Development and Enhancing Employability for the Youth - To promote Entrepreneurship among MSMEs - SME Clinic

Indian SMEs should raise interaction level to identify new biz opportunities, says Dr JS Juneja of PHDCCI

Although, the Indian SMEs are putting up a good performance but they should regularly interact amongst themselves to tap new business opportunities, according to Dr JS Juneja, Chairman, Task force on MSME, PHD Chamber of Commerce and Industry. He also said that government should take initiatives to ensure credit flow to the SME sector.

 

 

What is the role that PHD Chamber aims to play in India's SME sector?

 

Dr JS Juneja: PHD Chamber plays a significant role in India’s SME sector as most of its members are SMEs. PHD Chamber looks after the interest of all the members as it not only involved in advocacy but also assists them in growing their business. On behalf of all the members associated with PHD chamber, we ensure overall development and also help them to interact with other states. Also PHD has respectability in industry and builds the enterprise profoundly.

 

 

 

What are the current projects being undertaken by PHD Chamber?

 

Dr JS Juneja: PHD Chamber is working on a project named National Seminar on MSMEs, Gearing Up to Global Competitiveness: Problems and Prospects In India. Small and Medium Enterprises (SME) sector plays a pivotal role in overall economic growth of the country and contributes towards income generation, employment and exports. A few topics that will be discussed in the above mentioned seminar are (a) 12th Five Year Plan: Issues & Policies reforms pertaining to SMEs (b) Funding for MSME – Issues & Challenges. (C) Building a Global Competitive MSME Segment – Role of States.

 

 

How do you think that the Indian SMEs are performing in the present economic crisis?

 

Dr JS Juneja: Indian SMEs are performing quite well but have their own problems and issues. The economic liberalisation in India refers to ongoing economic reforms in India that started on 24 July 1991. In order to sustain and grow, it is very important for the SMEs not only to deal with big corporate, government companies but also to interact amongst themselves to identify new business opportunities.

 

 

What are the key challenges faced by the Indian SME sector?

 

Dr JS Juneja: First and foremost challenge that is faced by Indian SME sector is finance. The flow of money to SME sector should be checked after every 5 years. Government departments, banks, financial institutions and corporate should take the initiative of funding SMEs in India. Problem of imports and duty are issues of great concern. China has become India’s competitor as they are manufacturing almost everything that is needed in India. In China, industry enjoys full support of government. Electricity and labour is available at cheaper rates. In India, the labour laws needs to be amended so that infrastructure development takes place accordingly. The other problems in India are - manufacturing capacity is poor, labour is not skilled and technological development has to be done properly.

 

 

Do you feel that government policies (both Centre and state) are working in favour of the SMEs? Are they assisting these companies in alleviating the pertinent issues?
 

Dr JS Juneja: Yes, government is taking steps to promote SMEs in India. The below mentioned steps are few of them taken for the betterment of SMEs.

 

(a) MSME Development Act 2006.

(b) Skill development mission that is chaired by Prime Minister Dr Manmohan Singh.
(c) Prime Minister Task Force.
(d) National Manufacturing Competitiveness Programme (NMCP).

 

 

 

 

Kindly throw some light on the importance of information and communication technology (ICT) for SMEs.

Dr JS Juneja: ICT helps in promotion of business as portals have got all the information and hence, reduce cost of travelling. Use of smartphones also helps in promoting the business. ICT tools can be used by all the SMEs as it is not too expensive. The adoption of technology improves the standard of marketing. The third industrial revolution will be taking place on ICT within next 4-5 years.

PHD Chamber is actively involved in creating awareness as recently we had organised a seminar on affordable ICT solutions for SMEs to reduce cost and complexity in business operations. When asked by ‘Bill Gates’ the role of ICT he said “by the year 2015 only two kind of companies will exist (a) Company that support ICT tools (b) No company.



What is the outlook for the SME sector in this year?

Dr JS Juneja: They are doing well and domestic market is in good condition. People are happy as exports are also taking place. SMEs sector should improve the quality and start using ICT tools for promoting the sector. The sector should tie up with big companies. The companies can bring changes if they are actively involved in imports and exports.



Kindly share the roadmap of PHDCCI for the ongoing financial year 2012-13.

Dr JS Juneja: The Chamber had recently organised seminar on ICT solutions; states specific programmes will be organised as well. A memorandum of understanding (MoU) has been signed with National institute of design (NID). PHD Chamber successfully conducted a series of such design awareness seminar in Agra, Faridabad, Roorkee, Delhi, AMBALA, Gurgaon and Meerut in different subject audience clusters with one additional workshop in Jodhpur between January 2012 to September 2012. Our association with NID has strengthened and goodwill created by virtue of the above mentioned initiatives.

SMEs should leave comfort zone & identify new markets, says Chandrakant Salunkhe of SME Chamber of India

Small entrepreneurs should concentrate on the domestic market as the development of local market would help them buoy up the slowdown in the exports. Chandrakant Salunkhe, the president of SME Chamber of India, shared this while talking exclusively to SME News. He also shared that it is now more important for SMEs not to concentrate only on the exports, but also on the domestic market.

What is your opinion on the state of exports in the country? How is the current global market scenario for exports by SMEs?

Chandrakant Salunkhe: After registering a healthy growth of 21% in 2011-12; India's exports have declined consequently for last three months - by 15% in July 2012; by 5.5% in June 2012 and by 4.16% in May 2012. For the first 4 months of 2012-13, the total exports dropped by 5.06% compared to the same period during the last year. The decline has been mainly due to the lower global economic growth and ongoing euro zone debt crisis which has led to lower demand of goods and services in one of the largest markets. As far as the export market scenario for SMEs is concerned, the lower global economic growth coupled with worsening euro zone crisis has created market situation very tough for SME exports. The sectors that have been worse affected include engineering goods, petroleum products, gems and jewellery, fruit and vegetables and iron ore.



What support and subsidies are being given to them?

Chandrakant Salunkhe: SME Chamber of India has been assisting SMEs both in manufacturing and services sector to enhance their business, exports and trade, enable them obtain the bank finance, PE & VC; joint ventures and technology transfers, contract manufacturing tie-ups; and also assist them with marketing, branding and promotion of their products and services. Also resolve their problems and issues.



Current Challenges for SMEs: - High interest rates charged by banks
- High inflation rate leading to high cost of raw materials as a result high input costs.
- Inadequate source of funds due to risk averseness of banks
- Lack of availability of timely funds
- Financial Crisis giving rise to delayed receipts of payments from Corporate/Customers.



Subsidies and Support given to the SMEs:
- Scheme of Surveys, Studies and Policy Research
- Entrepreneurship Development Institution Scheme
- Marketing Assistance Scheme (Implemented through NSIC)
- Performance and Credit Rating Scheme (Implemented through NSIC)
- Product Development, Design Intervention and Packaging (PRODIP) (Implemented through KVIC)
- Interest Subsidy Eligibility Certification (ISEC)
- Other schemes introduced by NSIC comprise of bank credit facilitation, Export credit Insurance, SME Credit Rating, Bill discounting schemes, Government stores purchase programme, infomediary services, facilitating marketing support, technology support and other support services.



In India, the SME segment is a fragmented one. In how much time do you think it would become organised?

Chandrakant Salunkhe: Commenting on the time required to make the Indian SME sector organized is tough. However the efforts are being made to develop SME clusters and various incentives are provided for SME Cluster development programs as well as for the SMEs having their operations in those clusters. At the same time various SEZz are being promoted in order to make the SME sector organized and there is an all-round development of the sector.



What are the growth opportunities for the SMEs available in the export sector?

Chandrakant Salunkhe: Currently the export sector is subdued mainly due to the ongoing euro zone debt crisis and is expected to remain the same for another quarter. However the sector presents ample of opportunities for the SMEs mainly in the field of the engineering goods, textiles, gems and jewellery, pharmaceutical products, metals and metal products, iron ore and other raw materials.



Are Indian SMEs fully aware about the advantages of the export-import business? What measures your organisation undertakes to make them aware?

Chandrakant Salunkhe: SMEs in the manufacturing business are aware of the benefits of the export-import business. The extent of the awareness might vary. However in order to increase the awareness amongst the Indian SMEs, the Council is organizing various Seminars, Conferences, Summits as well as various training programs from which the SMEs get the first hand information from the industry experts and also provides them with opportunity to network.



India's trade deficit widened in July as exports recorded their sharpest fall since November 2011. What do you think, in such scenario can the government miss its export target for the ongoing fiscal and will this further hit Indian rupee?

Chandrakant Salunkhe: It is important to understand that as the exports have dropped in July so have the imports in the same month. How and when the export market will pick-up will totally depend on global economic situation and the States of Euro zone. Commenting on whether the government would be able to meet the export target in the ongoing fiscal would be too early. The rupee volatility is dependent on various reasons and not just the availability of foreign currency in the country. The current volatility is mainly due to the uncertainty over Euro and other major currencies resulting in strengthening of the US Dollar.



What measures should government take on export policies in the wake of deficient monsoons this year?

Chandrakant Salunkhe: In view of deficit monsoon, the Government of India has already started taking various initiatives in order to boost the exports.

Some of them include:

- 2% interest subsidy scheme extended till March 2013
- Incentives for exports from north-eastern states in order to boost their participation
- Single revolving bank guarantee for different export deals to reduce time
- Market linked focus product scheme extended till March’13 for apparel export to USA and EU
- Government to come out with new guidelines to promote SEZs
- Steps announced to reduce transaction cost of exports in order to increase efficiency
- Thirteen shows abroad to promote Brand India to boost demand of domestic products across different countries.



Other key initiatives taken
- Shipments from Delhi, Mumbai through post, courier or e-commerce to get export benefits
- Ahmedabad, Kolhapur and Shaharanpur new Towns of Export Excellence
- Focus on market diversification to continue



How do you see Indian SMEs in terms of their performances?

Chandrakant Salunkhe: SMEs have been playing a major role in economic growth of the nation. They have been outforming the Corporate, however their performance is marred by various glitches in the policies and other areas of their concern. Initiatives are being taken in order to develop the clusters so that it would enable the SMEs to achieve an all-round growth.



Please share your roadmap for the current fiscal (2012-13).

Chandrakant Salunkhe: We have been assisting SMEs for a very long time and would continue to do the same in the current fiscal year too. We plan to organize various events and training programs in order to make SMEs aware on various policy measures and other incentives available to them. These programs will also concentrate on various risk management strategies in order to enable to mitigate the risk arising due to currency fluctuations and uncertainty in the West. Also we are putting efforts for empowerment of SMEs so that India can achieve 7% growth in the current fiscal year.



What is the outlook for the sector, especially SMEs, in the next 6 months?

Chandrakant Salunkhe: It is important for SMEs not to concentrate only on the exports, but also concentrate on the domestic market. There is a vast scope in the domestic market and if SMEs develop this market completely it would help them buoy the slowdown in the exports. Also it is necessary for them to get out of the comfort zone and try and identify new markets as well as new and innovative products. The sector though affected by the slowdown will continue to grow and government is taking initiatives to provide adequate support to the sector.

Global uncertainties hitting demand in apparel sector, says AEPC Chairman

 In an exclusive interview, Dr A Sakthivel, Chairman of Apparel Export Promotion Council (AEPC) said that the profitability of SMEs in apparel sector is facing the heat of consistent decline in Indian rupee. He further conveyed that many SMEs are not able to fully use their installed capacity, which in turn is negatively impacting them.

What is the role that AEPC plays for the Indian SME sector?

Dr A Sakthivel: AEPC plays pivotal role in facilitating the trade to SME units of apparel exporters. We currently have 8000 exporters as our members and more than 85% of them are under SME category. Besides the day to day support in trade affairs, AEPC is also providing the SME's good platform to equip themselves with all modern way of supply chain management practices. There are various policies announced by the government in support of SME's of India which are regulated and facilitated through AEPC. To give them exposure of international marketing and to improve their business, AEPC organises exhibitions, fairs, and buyer seller meet in domestic and overseas markets. After, quota phase out, capacity building of SMEs in terms of handling demand and availability of work force has been taken very seriously. To accomplish the objective of capacity building, various ATDC centers have been opened all across the apparel clusters where workers are trained to handle modern machineries. Moreover, technical modernisation, supply chain management, to comply with the WTO regulations and spreading awareness about benefits of FTA/PTA among SME's have been taken onboard. AEPC keeps on organising workshop and seminars in apparel clusters across the country. We have gone beyond this by launching the DISHA project which is aimed at encouraging socially responsive business practices among the Indian apparel exporters.

What are the current projects being undertaken by AEPC?

Dr A Sakthivel: Currently, AEPC is engaged in the project of Knitwear Technology Mission, DISHA- a project on Capacity Development and awareness on Social and environmental Compliance of Indian apparel industry. Besides this fairs, exhibitions and buyer-seller meet at domestic and overseas market is our yearly feature. Since last three years, India is facing stiff competition in international market specifically from the South-Asian and Southeast Asian competitors. To understand the reason for India’s low performance and create a strategy which can help in increasing the Indian apparel export share in world trade, we have established sub-committee on competitiveness and on innovative garments which are doing fantastic job. Once the study is completed we would be in a position to understand the changing dynamics of competition and how Indian exporters can cope up with the pressure of competition. All these inputs and knowledge will add to our capacity which will be shared with the SME sector for their export promotion.

How do you feel the SMEs are performing in the apparel sector?

Dr A Sakthivel: In the current fiscal year, SMEs are facing problem in getting more orders as the rupee is falling and possibility of getting business from US and EU is little hazy. Some of the SMEs are not able to utilize the 60% of installed capacity, which in turn is affecting their profitability.

Do you feel that exports are placed aptly for these SMEs?

Dr A Sakthivel: Yes, apparel sectors are well suited for the SMEs. As a matter of fact, 85% of Indian apparel export to world is contributed by the SME sector alone.

About 45 lakh people in the textile sector have lost jobs in the last two years. How do you think the sector will perform during the present fiscal?

Dr A Sakthivel: The uncertainties in the western markets have impacted the demand position. If you look at the import of major markets, like US and EU which contributed 80% of our total export to world, registered decline in volume wise import which suggests that in term of quantity export are not increasing. However, with the focus given to textile and apparel sector in the recent Foreign Trade Policy (FTP) announced, we are hopeful of a speedy recovery.

How do you find the annual supplement to Foreign Trade Policy announced recently?

Dr A Sakthivel: I am thankful to the Hon'ble Textile, Commerce and Industry Minister for giving the industry such a wonderful package this year. With 2% Interest Subvention, 2% Market Linked Focus Product Scheme to US & EU and for giving a new post export EPCG Scheme, the exporters can improve their competitiveness. On behalf of the industry, I assure our Minister full support in trying to achieve the targets set for this sector. I hope we would be able to achieve the targets of $18 billion given by Ministry of Textiles for the FY 2012-13.

How is it likely to help apparel exports? Please share some benefits and outline what else could have been incorporated.

Dr A Sakthivel: This policy will support apparel industries in multiple ways. It will help exporters in terms of diversifying their market base, along with the modernisation of the units because EPCG and TUFS status holder schemes have been extended. Newly permitted utilisation of scrip's under FPS, FMS and MLFPS for payment of excise duty for domestic procurement would definitely help the apparel SME exporters. Simplification of export procedures like Advance authorisation at all EDI ports, export benefit to sample shipped from Delhi and Mumbai and single revolving bank guarantee for different transaction would definitely help in bringing down the transaction and would surely fasten the delivery time.

What are the main challenges the SMEs in the apparel sector are witnessing? D

Dr A Sakthivel: Underutilisation of installed capacity, increased wages, stringent labour laws and unstable world apparel demand are the major causes which are affecting the SMEs sector.

Do you feel that government policies are working in favour of the SMEs?

Dr A Sakthivel: Yes, if we look from the export policy point of view they are helping exporters to increase their exports. However, there are certain policies like labour laws which do not favour the apparel exporters as the apparel business has changed drastically in the global map. There are changes in demand patter like delivery schedules are becoming short, apparel export facing seasonality in demand for which Government is trying to find ways.

Kindly share the roadmap of your council for this fiscal.

Dr A Sakthivel: For this fiscal year ie. 2012-13 Ministry of Textile has set target of $18 billion. To resist the jolt of world economic crisis, we have made certain strategies wherein we are emphasising on the diversification of market base. To diversify the market this year, we are organising mega show in Tokyo, Japan which is the third largest importer in world and India's share in import is less than 1%. Success of this show may bring huge apparel business for India as it has already concluded India-Japan CEPA, which became effective since August 2011. Under the agreement, duty free apparel import has been allowed in Japan since August 2011. We are organising buyer’s seller meet in Tel Aviv, Israel; Barcelona and Madrid in Spain and New York in US. We have also planned mega apparel show called magic fair in US.

Promotion of micro irrigation will allow small farmers to reap benefits, says K Suresh Kumar of Tamilnadu Foodgrains Marketing Yard

The adoption of micro-irrigation systems (drip and sprinkler) can help small and marginal farmers to earn handsomely and will also allow them to reap all benefits which were available only to big farmers. K Suresh Kumar, executive director of Tamilnadu Foodgrains Marketing Yard (TFMY) shared this during an exclusive interview.

 

How would Contract Farming prove helpful to farmers ?

K Suresh Kumar: Basically farmers are bound to get organized in contract farming. This will lead to formation of natural clusters among themselves. Empowered as a group they will have a good bargaining strength in their supply chains; great access to banking finance and crop protection insurance; and possible inroads into Research Institutes to obtain the expertise in the crop production. Professionalism will set into agricultural practice.

This apart, having resolved the problems of marketing; and to some extent the post harvest management; in the contract farming, they can focuss their full attention on crop productivity which is one of the lowest among the average world records and; which is the only solution for their viability and feasible farming.

What kind of assistance Tamilnadu Foodgrains Marketing Yard provides to farmers ?

K Suresh Kumar: We provide a solid platform for the entire post harvest management, like :

- Scientific Storages

- Low temperature Cold Storages

- Cleaning of grains in removing foreign matters, immatured and infested grains

- Protection for the grains through sophisticated packaging solutions

- Agri Business ICT

- Auction Centre

- Food Analytical Lab

Besides, we are also into the initiatives of non chemical jaggery preparations and less water consuming millet crop promotion.

What measures should Central government adopt to make drought-proof agriculture in India?

K Suresh Kumar: The Central government should seriously put their mind and focus all their efforts towards NATURAL FARMING. They need to launch it as a NATIONAL LEVEL MISSION giving top most priority in their Agenda. This is not only the solution for drought but also for normal and flooding conditions too.

Recently, the Tamil Nadu Government launched projects to upgrade horticulture output in the state as part of an India-Israel joint venture. Please throw some light on the same.

K Suresh Kumar: A nursery for fruits & vegetables in an outlay of Rs 10.18 crore and for cut flowers for Rs 8.80 crore and to upgrade infrastructural facilities in 56 state owned horticultural farms to produce quality seeds using modern technology are the salient features of the projects recently launched by Tamilnadu Government to upgrade horticulture in the state. This initiative will definitely pave the way to the number one position in horticulture of our country. We welcome similar measures on upgradation of pulses & oil seeds production also.

In a bid to promote micro-irrigation among farmers in the state, Jayalalitha government has announced 100% subsidy for small and marginal farmers. What do you think, will the move be able to popularise the concept of micro irrigation among farmers?

K Suresh Kumar: Definitely the move will popularize the micro irrigation concept among small and marginal farmers since they are going to reap all the benefits which were available only for big farmers who could afford for drip and sprinkler irrigation.

How is natural farming advantageous than organic farming ?

K Suresh Kumar: In organic farming agricultural practices are almost the same as conventional farming. The major difference is only non chemical inputs. But natural farming is totally a different practice which generates all its input in the field itself and requires very less man power – the major boon of our Indian agriculture facing serious threat of high input cost and shortage of labour.

In your opinion, what kind of initiative should the government take to promote India's food grain exports?

K Suresh Kumar: The government should identify all time surplus crops and make a list. They should bring world class technology to add value for the surplus crops promoting agro processing units. Incentives can be given to boost the exports of value added agro products – which will ultimately strengthen our industry and the farming activities realizing more money value.

What are the key priorities of TFMY ?

K Suresh Kumar: On pulses & oil seeds, which are in short supply and are being imported in huge volumes, TFMY wants to promote all import substitutional measures – developing high yield nutritive varieties, establishing infrastructural to minimize post harvest losses, to organize the crop production among farmers professionally.

On surplus crops like paddy and spices we would like to develop more value addition catering to the need of the consumer and promote the Trade Internationally.

Please share your roadmap for the current fiscal (2012-13).

K Suresh Kumar: Having established the post harvest infrastructure in around 30 acres we are now in the process of making network with organizations like :

- National Bank for Agriculture and Rural Development (NABARD)

- National Small Industries Corporation (NSIC)

- Tamilnadu Agricultural University (TNAU)

- Indian Institute of Crop Processing Technology (IICPT), Thanjavur

Contract farming not feasible for SMEs, said MA Tejani of All India Food Processors' Association

The concept of contract farming, promoted by Centre, is not feasible for SMEs since their needs are not huge, said MA Tejani, president of All India Food Processors’ Association and managing director of Gits Foods.

 

Although, he appreciated the concept of mega food parks in India, but raised questions on its lucrativeness for the SME entrepreneurs.

 

 

What is the role that All India Food Processors' Association (AIFPA) aims to play in India's SME sector?
 

MA Tejani: AIFPA is the oldest organisation exclusively representing food processing industry in India. It was established in 1943 to promote the growth of food processing industry in India both by providing policy inputs to central and state governments and also providing technical, legal and other services to members through seminars, workshops and other programs/ events. AIFPA is a member on various government departments/ wings/ councils/ authorities/ bureau related to food processing and aims to provide required inputs to these bodies and keeping in view the interest of food processors and consumers.

 

 

What are the current projects being undertaken by All India Food Processors' Association (AIFPA)?
 

MA Tejani: The burning issue of the day is implementation of FSSA Act and Rules. There are myriad complexities and contradictions which AIFPA is actively taking up with the FSSA Authority and related ministry such as MOFPI, Agriculture ministry etc. Apart from the above, the usual activities of supporting the food industry continue apace.

 

 

How do you think that the Indian SMEs are performing in the food processing industry in the present global meltdown?
 

MA Tejani: It is difficult to assess the performance of SME in food processing industry with regards to export in absence of data. But generally speaking, the negative impact on export of processed foods if any would be marginal as food is a supreme necessity.

 

 

What are the key challenges faced by the SMEs who are working in the food processing sector?
 

MA Tejani: The key challenges have been and still are lack of adequate infrastructure and availability of agri-horticultural produce of processing varieties and distinct from table varieties. Other impediments on addition to FSSA Act are APMC Acts, Mathade Act Octroi etc.
 

Contract farming which is being encouraged by government is not possible for SMEs because their requirements are not large enough. Also, because the industry is widely dispersed throughout the country, consolidated buying is not possible. Regulators try to impose their personal will/authority irrespective of merit of any particular issue. Some of the food processors are yet to install HACCP food safety management system.

 

 

Kindly throw some light on the importance of mega food parks in the food processing industry?
 

MA Tejani: The concept of food parks and mega food parks is excellent. However, the actual establishment and implementation does not appear to have been successful till date for various reasons including viability.
 

It is evident that established food processing units would by and large not relocate from the existing places to a food park / Mega Food Park. Since the later are located quite far away from urban centers and lack the facilities available in cities such as housing, entertainment, education along with the difficulty of getting and retaining qualified and skilled personnel.
 

Mega Food Parks may not be very attractive to prospective SME entrepreneurs. Only time will tell the extent to which Mega Food Parks become successful. The example of SEZ’s is there for all to see.

 

 

Do you think government is taking appropriate steps to enhance the productivity of the food processing industry?
 

MA Tejani: A great deal has been done by the government to encourage growth of food processing industry in India. A special ministry has been established for the purpose. But business scenario is dynamic and fast changing so policy decisions to eliminate obstacles and provide incentives have to be continually monitored and speedily implemented. A National Food Processing Industry Development Council has been established in the current year under Chairmanship of Shri Sharad Pawar Union Agricultural Minister but action is yet to begin on the identified issues.

 

 

What's your reaction to government's reform initiatives such as FDI in multi brand retail sector? How will it impact the food processing industry?
 

MA Tejani: It would be premature to comment on the likely impact on food processing industry due to arrival of FDI in multi-brand retail sector. It is well known that big box retailers tend to exploit their suppliers and squeeze the supplies for higher margins to cover their high operational costs. This is proven by Indian big box retailers. It all depends upon the level of commitment, transparency, honesty and sincerity in implementation of FDI in multi brand in the short and long runs. In case, we lack in any of the above factors at any level the purpose of implementing FDI in multi brand would be lost.

 

 

Kindly share the roadmap of All India Food Processors' Association (AIFPA) for the ongoing financial year 2012-13
 

MA Tejani: AIFPA is working to enhance its footprints in India as an exclusive and dedicated representative of food processing industry unlike other industry bodies which have sections or departments pertaining to food processing. AIFPA has no other interest or function apart from promoting food processing industry.

Opportunities abound for SMEs to adopt mobile apps

Despite the global meltdown taking toll on the health of many economies, major technology vendors like Google and Apple are posting record sales. The big question which arises is that how the big players are able to maintain their stellar sales figures in the same business environment although the small and medium enterprises (SMEs) face problems to stay afloat? The answer is quite simple - they enhance their growth platforms by using innovative technology.
 

With changing time, the face of Internet is also evolving. The days of desktop and laptop computers are increasingly fading since more people are shifting to smartphones and smart pads, where information can be accessed at fingertips. Communicating with brands, purchasing products and services, and also making payments are increasingly becoming easier. Hence, for any SME business mulling to raise sales and expand their customer base, it is time to go mobile and go apps. As consumers prefer to access Internet through smartphones and tablet devices, it is also becoming inevitable for businesses to adapt the way they connect with their customers.

 

 

 

What are apps?
 

Mobile apps are considered as the functional programmes installed on smartphones and tablet devices. It varies from games such as the famous Angry Birds to messaging services such as WhatsApp messenger, travel guides and mobile newspapers. 

  

Why do businesses need apps?
 

Apps help firms to proactively drive business via vouchers and loyalty schemes, which in turn makes it a valuable proposition as compared to the traditional, passive advertising and marketing methods. Consequently, it offers new opportunities for revenue generation.
 

Apps enjoy the potential to be used as research tools, allowing data collection on customers’ preferences and also shopping habits, which proves helpful for refining business strategies. Over the years, these platforms have proved helpful for the big players as they can act as innovative communication channels for the businesses allowing them instant contact with their customers. They also offer firms with valuable opportunity to develop the concept of brand loyalty by providing exclusive, app-only promotions and offers. It has been proved that it enhances footfall into physical stores and also allows businesses to create 'healthy' relations with customers.

 

 

 

Realising importance of apps
 

It is important that apps go in accordance with the other marketing efforts and activities, whether it’s the traditional methods like print advertising or the online digital avenues. The presence of continuity throughout platforms plays a vital role since it leads to jump in customer-confidence.
 

SMEs and start-ups can make their presence felt on the digital landscape with the help of services as they can return multiple lucrative benefits.
 

Since with every passing day, rising numbers of consumers prefer to use their smartphones for shopping purposes, it seems that embracing 'app' culture is the way forward for retail businesses, be it small or big. Analysts feel that apps are a sure-fire way to boost any company’s full potential.
 

Mobile marketing is considered as one of the most powerful marketing methods available today. Marketing gurus are of the opinion that if any business doesn't have an app, then a major opportunity to improve sales and bottom line gets missed.
 

It is known that larger brands and big multi-national companies (MNCs) presently dominate the digital landscape in India. Given this scenario, it becomes a daunting task for the smaller businesses to infiltrate the market and enhance their presence. Despite facing problems, many SMEs and start-ups are happy to embrace apps since the benefits of having a mobile presence are high. 

  

Why Indian SMEs need apps
 

Over the past few years, the mobile users in India have evolved considerably. As per Nielsen survey, on an average Indian smartphone user spends about 72 minute per day for accessing Internet. Out of this 72 minutes, over 80% of time is spend for searching products and services. Nearly 30% of the time is spent on the social media platforms. Presently, India is home to about 137-million Internet users, out of this 70 million are mobile Internet users. Out of this 70 million, 20 million just access Internet only via mobile. 

 

 

 

Reasons why successful businesses have decided to take the plunge of app world -

 

- Grabbing eyeballs
 

Although, apps are usually associated with the MNCs, but an SME can surprise and delight its customers by offering apps. Allowing customers to interact with products via an app can help an SME stand out from peers. 

 

 

 

- Rising customers demand
 

Studies clearly prove that tablet and smartphone users mostly prefer apps over websites. The main reason is that websites are not very interactive as compared to apps are for mobile devices. Since apps are usually developed for the touch screens and are also optimised for fingers, it helps a mobile customer to access information about any products and services, without visiting the website. 

  

- Information
 

With short shelf life of products, rising competitive pressure and changing economic conditions, maintaining product information and pricing can emerge as challenging tasks. An app can be updated continuously with the recent information.

 

 

 

- Direct contact
 

An app has potential to push content and information to the customers automatically. Apps allow the SMEs to hold direct interactions with the customers. 

  

- Engaging with customers through apps
 

The interactive nature of an app is perfect for engaging customers and pushing them. Apps make it easier for transforming a prospect into a sale. 

  

- Maintaining stickiness of any business
 

Putting products into an app can increase the visibility of any business. Detailed information and photos about products will be at the fingertips of any customer. 

  

- Maintain competitiveness
 

Almost every big corporation presently provide mobile apps for the customers. Many SMEs are also slowly joining this game. 

  

Is it possible to judge the effectiveness of an app for any business?
 

These are few steps that would prove helpful in deciding the productivity of any app - 

  

- Known proper usage of any app
 

It is very important to know the main purpose of any app before proceeding with any development. These basic questions should be answered before creating an app:
 

· How will it help the customers/ users perform any task?
 

· Is it going to raise the brand awareness level?
 

· Will the app bring customer feedback?
 

· Is the app offering service or is it meant for just for entertainment?
 

· Is the app performing all of the above mentioned steps? 

 

  

-Awareness about customer
 

Do the target customers use iPhone, Blackberry, or Android platform? A better picture of which platforms are helpful in resource planning. Offering apps are useless if the customer feels no need or want for it. 

 

 

 

- Differentiate from the crowd
 

There are high chances that the apps provided by one company matches. Any app should have a unique feature or function that increases its uniqueness and also distinguishes it from the remaining. 

  

- Timely updatation of apps
 

If any business need sending regular updates to the customers, then it is possible to send small, bite-sized chunks of readable content as compared to lengthy content or electronic direct mail.
 

Creating a completely new, custom-made application can emerge as costly option. SaaS applications like ‘ShoutEm’ and ‘AppMakr’ are best suited for SME businesses that have limited resources to develop basic applications at cheaper rates. 

  

Apps market in India
 

Many global companies are looking at India to step up apps production. In fact, the domestic app market is also growing. The value of the Indian value added services industry, which comprises mobile apps, was projected at $3.4bn (£2.2bn) in 2011, said Deloitte. The mobile application industry in India alone is expected to reach $4bn by the year 2015, said Asia Pacific Research Group (APRG). 

  

Few of the important players in this field are -  

- Evernote - It gives permission to snap a photo, take a screenshot, type in text, or speak  note to capture information on the go.  

- LinkedIn – It helps in maintaining contact to keep in touch. It will offer update with what is happening in the professional network. 

  

- Business Week mobile app and Wall Street Journal Mobile App - Many people stay awake to get information on the go. For business, which aim to keep track of International news in their respective domains, may create way for LIVE information throughout the day and also abreast about the recent happenings.

 

 

 

 

- Research In Motion India (RIM) – The BlackBerry maker feels India offers huge opportunities in the Indian mobile applications sector. RIM has more than 55 million BlackBerry subscribers and BlackBerry App World is available in more than 100 markets with 30,000-odd registered developers from India. The strong market with high adoptability rate has made India a rising mobile application centre since each year quite a few SMEs posts rapid growth in this area.

 

 

 

 

- Bizzhappy – It unveiled a new app for the SMEs that help them to commence their own mobile marketing campaign. It also allows small businesses to establish an app to solve to questions like business details, promotions, social media, GPS locator, analytics and tracking.

 

Recently, Industry body National Association of Software and Service Companies (NASSOCM) has stated that SMEs should leverage on sectors such as cloud computing and mobile application platforms. In fact, Google aims to position India as an 'online and mobile first' advertisement market.

 

Conclusion
 

The world of app enjoys immense potential to enhance growth prospects for any business. A successful app should aim to offer right goals and services. India's role in the growth of mobile apps is expected to be huge and its hunger for apps will only get bigger.