Small units' big problems: Due to high costs Indian companies can't compete with China's firms

Abstract

THE Prime Minister is making a pitch for "Make in India" and encouraging foreign manufacturers to set up units in India. This is an encouraging trend and would certainly boost employment, growth and development of MSMEs (micro, small and medium enterprises) in India. MSMEs have a large potential in providing employment opportunities to the increasing number of youth in the economy. MSMEs contribute nearly 8 per cent of national GDP, employing over eight crore people in nearly four crore enterprises and accounting for 45 per cent of manufactured output and 40 per cent of exports from India. Thus, the focus of the government on MSMEs at this juncture of economic slump is justified because these units have a potential for providing growth and employment. In view of the significance of the sector, since 1948, successive governments have been making intense efforts to encourage MSMEs. The office of Development Commissioner for MSMEs, was set up in 1954 and a dedicated Ministry for MSMEs was established in 1999. The Small Industries Development Bank of India (SIDBI) was established in 1990 to serve as an apex body for promotion, financing and development of MSMEs. The government announced a number of measures in its first budget presented in July 2014 and a committee was also proposed to examine the financial architecture with a view to removing bottlenecks and creating new rules and structures for the sector. Read more at: https://www.tribuneindia.com/2014/20141020/edit.htm#4