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FICCI suggests five-pronged plan for SME growth

It recommends the plugging of technology gaps and providing low-cost financing to small units.

business Updated: Jun 24, 2007 23:30 IST

To boost the development of SME sector, Industry body Ficci has recommended a five-pronged strategy, which includes plugging of technology gaps and providing low-cost financing to the small units.

Networking support for gaining access to new markets and information on new products and technologies besides provision of institutional support for training and skill development need to be integrated in the SME sector, a chamber release said.

Lack of an inter-institutional synergy, dearth of committed NGOs and industry associations, paucity of good consultants and services providers have led to limited success of the various initiatives undertaken so far, it said.

The strategy could be applied to select clusters at different locations with varied product group and based on the experience, the developmental model could be replicated in other clusters, the chamber said.

"Indian clusters need to match up to international standards to compete in international markets as well as on the domestic turf. This would necessitate intensive studies of specific clusters to identify the technology gaps vis-a-vis best practices in the developed economies," the release said.

Large private sector needs to be involved in the developmental programmes, especially in the areas of capital intensive Common Facility Services, it said.

The availability of finances at a reasonable cost is the core issue in the context of modernisation of SMEs. Therefore, the government needs to make available low-cost funds for effecting modernisation of clusters, Ficci said.

Fostering an organic linkage between Indian clusters and similar product cluster overseas would be of immense help. Networking can play a dominant role in supporting SMEs for gaining access to new markets and information on new products and technologies, which may be difficult for them to achieve on their own.

The institutional support becomes very essential for training and skill development needs of SMEs and in the chamber's view it is much easier to impart training in clusters than to scattered units.

Programmes for encouraging industry and industry associations to set up their own training facilities need to be devised, the release added.

First Published: Jun 24, 2007 11:21 IST