Mumbai, Aug. 8: The Confederation of Indian Industry (CII) will guide small enterprises in coping with competition in a “borderless world in 2005”, when imports become cheaper.
Small and medium enterprises (SME) form the backbone of the CII, which is generally associated with the Bajajs, Munjals, Mahindras and Godrejs. Almost 44 per cent of its members come from the small-scale sector, while 42 per cent are represented by medium-scale firms. Its corporate membership stands at 5000. There are 1.5 lakh indirect members affiliated to sister organisations.
Deputy director-general Gurpal Singh is heading what is called a ‘cluster approach’ initiative. Under this, small units will be mentored indiverse areas such as quality control, marketing arrangements, recovery of receivables, professionalism in management and inventory control. The industry body is upbeat following an experiment in the Mohali experiment. “We have created a successful model,” Singh said.
At Mohali in Punjab, the CII had zeroed in on a cluster of 16 manufacturing units, mostly in the auto sector, and held workshops that helped entrepreneurs improve production practices, scale up businesses and enrich financial models. Experts in different areas mentored the entrepreneurs.
All this came for a price that the businessmen didn’t mind paying, Singh said. For the 15-month exercise, they had to pay Rs 1 lakh each, in instalments, he added.
Many small-scale units have become sick for neglecting crucial areas. The CII has tried to rectify them. It includes fund availability, infrastructure, technological obsolescence and over-dependence on government purchases.
The businesses at Mohali are now more focused and have reached a size and scale that otherwise wouldn’t have been possible. Encouraged by this, the CII is adopting the same approach for clusters in Calcutta (near Howrah), Bhopal and Pune. The industry body is also in the process of identifying other clusters.
Singh, however, acknowledges that “we are slightly behind” as competition from China and other Southeast Asian economies become a reality by 2005.