"Technology upgradation is the key for SMEs"
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Union Minister of State for Industries, Dr. Ashwani Kumar says that technology upgradation is the only way to improve quality and cost competitiveness of the SME sector. While inaugurating the "SME Summit 2008" 2nd February at New Delhi, the Minister said SMEs should be encouraged to innovate and they should be assisted in filing patents. The Summit was organized by the FIEO’s Northern Region office in association with Birla Institute of Management Technology (BIMTECH). The Minister further said that public private partnership should be encouraged for funding the R & D activities to promote this sector. According to him, all countries of the world today, including India, are focusing on SMEs. |
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Dr. R K Dhawan addressing the gathering. On the dais from left, are, Mr. K K Krishnan, Faculty, BIMTEC; Mr. G Jayaseelan, CGM, NSIC; Mr. Jawhar Sircar; Dr. H Chaturvedi, and Dr. Ashwani Kumar. |
Indian SME sector, the Minister says, accounts for 95% of the industrial units and contributes to about 40% of the value addition in the manufacturing sector, nearly 80% of employment in manufacturing sector and about 35% of the overall exports from the country. He adds that in India there are about 3 million registered and 10 million unregistered SMEs making it one of the largest SME sectors in the world, producing about 7,500 items and providing employment to more than 178 lakh persons.
Earlier, FIEO’s Northern Region Chairman Dr. R. K. Dhawan in his address mentioned that despite supplying huge volume of goods for exports, not many SMEs were able to enter into export business on their own. He said: "In the absence of effective trade promotion and export development programmes, SMEs require the support of large enterprises to sell their products in the international markets. The SMEs also fail to avail of the incentives and benefits extended by the government on exports as their produce is exported indirectly. And, without the support of incentives their products would become uncomp-etitive in international market."
Dr. Dhawan further said that the SMEs were often confronted with formidable obstacles towards diversification and capacity building. Their main obstacles, according to him, are related to finance, technology, human resource development, promotion and marketing, infrastructure, government policies, fluctuations in currency rates etc. Meanwhile, Dr. Dhawan stressed that if adequate policy framework was provided to these units, they could generate huge foreign exchange for the country as they were naturally equipped to adapt to the changing market trends.
Speaking further, Dr. Dhawan said that lack of awareness of trade policies, incentives and benefits was a major reason why SMEs were not availing the export benefits. He said: "SMEs are product and technology focused and lack the manpower, skill and experience for focusing on international marketing." He suggested that SME oriented training programmes should be organized to meet the human resource development challenge for the sector.
Mr. Jawhar Sircar, Addl. Secretary, Ministry of Small & Medium Enterprises, in his address mentioned that Indian SMEs were producing around USD 140 bn worth of industrial products valued at Rs 5.6 lakh crore. In order to keep this sector competitive, he said, we need to focus on three areas i.e. technology, finance and skills. He added that the government was aware of the fact and was running various schemes to meet the requirements in these three areas.
Dr. H. Chaturvedi, Director, BIMTECH, said that the potential of the SME sector to compete in the international markets was evident from its share of about 35% in our total exports, but the sector was held back from achieving its full potential because of various problems such as lack of information and awareness. The SMEs, according to him, need international exposure and outlook which is vital for successful market penetration in global markets. A flexible combination of government policies and market freedom, together with a finetuned mix of macro and micro policies are needed for the creation of vibrant and dynamic SMEs in the export sector, he suggests.
The Summit involved 3 plenary sessions covering themes like infrastructural and institutional framework, environmental and social , sector specific and financial issues. It brought out key aspects on how to increase the capability of Indian SMEs and to provide right information to move ahead in the global arena.
