| Muthiah: Small is beautiful
New Delhi, Jan. 28: The Federation of Indian Chamber of Commerce and Industry is suggesting the creation of a small industries development fund (SIDF) with an initial corpus of Rs 5,000 crore to be managed by the Small Industries Development Bank of India (Sidbi). Disbursement from the corpus will be routed through Sidbi’s network of branches as well as through primary lending institution in order to boost credit availability to small-scale industries.
Ficci, which is organising a national conference on reforms of small and medium term enterprises (SMEs) in association with the Bharat Chamber of Commerce in Calcutta next week, will also recommend the creation of a market development assistance fund with an initial kitty of Rs 500 crore for the development of marketing infrastructure for the SSIs.
“We want the fulfilment of five major objectives for this sector that includes easy availability of funds to SMEs, employment generation, softer finance, market accessibility and less of inspector raj,” Ficci president A.C. Muthiah told The Telegraph.
“When big multinationals come to India they set up their ancillaries in India. But we want to see a synergy happening between their ancillaries and ours,” Muthiah said.
The Ficci president said, “We want to encourage the cluster concept in the SSI sector. This marks the true growth and development in them. It is, therefore, necessary for the government to formulate policies for promoting venture capital, incubation funds and capital markets as innovative source of financing the SSIs.”
Last month, Ficci had organised a conference on SMEs which was attended by Prime Minister Atal Bihari Vajpayee and Vasundhara Raje, minister for small scale industries. The chamber had then promised to the Prime Minister that “it will take the matter to the states”.
Muthiah said, “We are making our efforts initially in the eastern region that will be subsequently followed in the southern and western regions. The incidence of sickness in eastern India is higher in comparison to other parts of the country. This trend needs to be reversed.” In 1980-81, West Bengal produced approximately 9.8 per cent of total industrial output produced in India. This, however, declined to 4.7 per cent in fiscal 1995-96 and went up to 5.1 per cent in 1997-98.
In 1985-86, the Calcutta airport and port handled 10 per cent of exports and imports of the country which dropped to a low of 4 per cent in 1998-99. “Considering the fact that SMEs account for almost 34 per cent of India’s exports, it is important that we work aggressively in the SME sector take back the figures to their original level,” said Muthiah.