The Telegraph
Since 1st March, 1999
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Atal wants change in rules for small units

New Delhi, Dec. 20: Prime Minister Atal Bihari Vajpayee today urged the government and the financial institutions to pay greater attention to small-scale industries. Stressing the need for change in legal and administrative framework, he said rules and regulations along with the guidelines need to be amended.

Addressing the global summit on SMEs organised by the Federation of Indian Chambers of Commerce and Industry, Vajpayee said “the governmental and semi-governmental agencies need to do much more to act as facilitators in order to make small and medium enterprises more competitive.”

Vajpayee called for a workable action plan for the development of small and medium term enterprises. “While 11 years of liberalisation have given big businesses greater freedom to operate, the inspector raj still stifles small businesses. All enterprises — and especially SMEs — must be speedily liberated from the heavy burden of untenable constraints and hurdles they face,” Vajpayee said.

The Prime Minister said small and medium term enterprises have always been the engine of growth for every country, in developing as well as in transition economies. This can be backed by the fact that they represent over 80 per cent of the industrial enterprises in most countries. SMEs, along with micro enterprises, have been identified as high potential sector for employment generation and source of livelihood to millions of people in Asian, African and Latin American countries.

The Prime Minister, however, pointed out that the “process of globalisation has impacted SMEs much more than larger business enterprises”.

Union minister of state for small scale industries, Vasundhra Raje said, “While small and medium term enterprises are significantly growing by approximately 9 per cent every year, the flip side is that they are now being exposed to greater competition from overseas.”

Vajpayee said that while the opening of national economies, coming down of trade barriers, constant arrival of new range of products and the introduction of ever new processes of production and service provision have transformed the business operations of SMEs, they have in a way created some problems for the SME’s also. However, they have also created new opportunities to innovative enterprises.

He added, “The challenge before the SMEs is how to capture these opportunities and at the same time and reduce the chances of failure.”

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