This article discusses innovation and R&D for small and medium enterprises (SMEs) in India. It notes that SMEs play a vital role in the Indian economy, contributing significantly to industrial output, exports, and employment. The article emphasizes the importance of innovation for SMEs to gain competitive advantages. However, it states that most Indian SMEs still rely on importing technology rather than developing it in-house or collaborating with national R&D centers. The barriers to innovation for Indian SMEs include financial issues and a lack of access to new technologies. The government is taking steps like the proposed Small Enterprises Development Bill to promote SME growth and innovation by creating a more supportive regulatory environment.
1. JIGYASA Volume 1 Issue 1
NITIE
Industry Institute Partnership Cell
2. 2
About Industry Institute Partnership Cell
In the changing scenario of globalization and emerging new technologies, relationship between
Industry and Institute has become indispensable to improve industrial competitiveness in the
emerging economic landscape. In this endeavor Industry Institute Partnership Cell (lIPC), NITIE
proposes to provide cost effective solutions to the techno-managerial problems faced by the Small
Scale Industry through participation of NITIE Faculty and students in solving industrial problems.
Started in 1995 under the aegis of AICTE, IIPC, NITIE has come a long way in providing support to
the SSIs in and around Mumbai. It aims to strengthen the Industry Institute linkage with the small
scale enterprises, IIPC, NITIE seeks to extend the training & consultancy services to Small-scale
enterprises.
IIPC, NITIE has an objective to strengthen the relationship of institute with Industries through
various activities
Organizing Seminars, Conferences and Workshops for SSIs
Training and Consulting Services for SSIs
Undertaking Business Improvement projects
IIPC, NITIE can offer assistance in the areas of Operations, Materials, Accounting & Finance,
Marketing, Information Technology. It can offer general as well customized programs (both training
& consultancy services) for the Small Scale organizations located in Mumbai and its near vicinity.
Productivity and Quality
Value Engineering
Materials Management
Financial Management
Marketing and Sales Management
Specific Topics for SSIs
NITIE – IIPC has also organized seminars at the following Industrial Associations
Bombay Industries Association
Ghatkopar Industries Estate
Vasai Industrial Association
Taloja Industrial Association
For more information visit http://nitie.net/iipc/
Coming together is a beginning… Keeping together is progress… Working together is
success. (Henry Ford)
NITIE is one of the premier business schools in India. Established in 1963 by the
Government of India, through the International Labor Organization (ILO) with the
assistance of United Nations Development Program (UNDP), it has consistently been
ranked as one of top 10 business school over the years. NITIE is an autonomous body
under the Ministry of HRD, Government of India and is governed by a Board of Governors
comprising eminent personalities from government, academia and industry. It is
recognized as a center of excellence along with the IITs, IIMs and IISc by the Ministry of
HRD, Government of India. It has been ranked as 7th best B school in India by Wall Street
Dctor Journal in 2009.
For more information visit www.nitie.edu
Jigyasa IIPC, NITIE Mumbai
3. 3
Message from the Director
It gives me immense pleasure to know that the Industry Institute
Partnership Cell have initiated publication of a magazine “Jigyasa.” This
has the promise of taking the mission of NITIE – “To nourish a learning
environment conducive to foster innovations in productivity and
business development” forward. The application of classroom learning
to the real life problems faced by the corporate world would be the
greatest test of the mettle of budding managers of NITIE. Under the
able guidance of faculty members, students have been active in
providing cost effective solutions to the techno-managerial problems
faced by MSMEs for a long time. Jigyasa has the promise of reaching
out to even more numbers of MSMEs. I am confident that MSMEs
would benefit from their endeavor as much as they would get a chance
to implement their classroom learning to the real life problems.
These continued efforts to bring innovative methods to bridge real life
issues faced by industry, go on to reinforce the continuous ranking of
NITIE among top business schools in the country. No wonder NITIE
continues to be the preferred destination for leading business
establishments seeking the finest managers.
I applaud the zealous efforts of the students of IIPC and Prof. V. B.
Khanapuri who have taken the lead in this initiative. It is heartening to
be a part of the process that takes all the enterprising individuals and
companies along the learning curve of the institute. I wish the team all
the success ahead.
Dr. Subhash D. Awale
Director
NITIE, Mumbai
Jigyasa IIPC, NITIE Mumbai
4. 4
Message from Prof. Vivekanand B. Khanapuri
I congratulate the members of Industry Institute Partnership Cell
for coming out with the magazine Jigyasa, focused primarily on
issues/challenges faced by Micro Small and Medium Enterprises
(MSME’s). The magazine aims to bridge the knowledge gap by
dissemination of academic knowledge in terms of theoretical
frameworks, case studies and also provide relevant news to the
MSME’s. This I believe will go a long way in facilitating this
sector in enhancing their competitiveness and in turn contribute
towards the economic growth.
The students of NITIE apply their classroom learning to the live
industry problems in the MSME sector taken up under the
guidance of faculty members. MSME’s would thus benefit from
these varied experiences at these units along with the research
done by faculty members of the institute.
As the mouthpiece of the IIP Cell grows, I hope it quickly builds
up a reputation for a good read and reliable delivery. There are
some who can envision and even fewer who can bring that to
reality. I am delighted to see their vision and common dream
taking shape through toil in inception of this magazine. I hope
this magazine brings in more corporate and expert involvement
as it grows bigger and better, with wider distribution of its
upcoming editions. I have all my best wishes for making it
successful and sustainable.
Prof. Vivekanand B. Khanapuri
Professor-in-charge
Industry Institute Partnership Cell
Jigyasa IIPC, NITIE Mumbai
6. 6
Contents
About Industry Institute Partnership Cell 2
Message from the Director 3
Message from Prof in Charge 4
From the Editor’s Desk
5
Articles
7
Leaning SMEs
Innovation and R&D for SMEs in India 8
Latest Trends in ERP and its intervention
10
for SMEs
SMEs working capital management 12
News Feature
World around SMEs 13
In Picture
Previous workshops, seminars and
conclave 15
Jigyasa IIPC, NITIE Mumbai
7. 7
Leaning SMEs
st
Amit Gera, I year PGP NITIE amitgera85@gmail.com
Lean is about doing more with less: Less time, As an organization applies lean principles, it is able to
inventory, space, people, and money. Lean is about realize a net decrease in inventory and thus a net
speed and getting it right the first time. increase in cash. . Lean principles will enable any
Lean manufacturing is a systematic approach for organization to navigate the credit crunch by freeing
identifying and eliminating waste in operations up cash, improving product quality, and reducing
through continuous improvement for doing costs while growing as a company.
everything more efficiently, reducing the cost of Lean principles can help SMEs in increasing
operating the system and fulfilling the customer’s productivity by practicing the following 5S strategy
desire for maximum value at the lowest price. step by step:
Lean principles come from the Japanese Sort: Organize the work area, leaving only the
manufacturing industry. tools and materials necessary to perform daily
Lean theory basically focuses on reducing the 3 activities.
types of waste in an organization: Set In Order: Orderly As an
Muda: Non value-adding work arrangement of needed items
organization
Muri: Overburden so that they are easy to use
Mura: Unevenness and accessible for “everyone” applies lean
(making the process smooth) to find. Orderliness eliminates
For many, Lean is a set of "tools" waste in production and
principles, it is
that assist in the identification clerical activities. able to realize
and steady elimination of these Shine: Keeping everything
wastes (As waste is eliminated clean and swept. This a net decrease
quality improves while production maintains a
in inventory
time and cost are reduced.) safer work area and problem
Examples of such "tools" are Value areas are quickly and thus a net
Stream Mapping, Kanban (pull systems) and Poka- identified. An important part
Yoke (error-proofing). of “shining” is “Mess
increase in
It is often understood that implementing lean Prevention.” cash.
processes lead to more layoffs, but it depends on Standardize: Creating a consistent approach for
the type of process used by the company. For the carrying out tasks and procedures.
company using make to order, shop floor tasks tend
to become more specialized, making substantial Sustain: Discipline and commitment of all other
layoffs more difficult to execute, whereas in the stages. Without “sustaining”, your workplace can
make-to-stock, there are more workers doing the easily revert back to being dirty and chaotic.
same tasks. So, it is relatively easy to downside
some portions of that workforce consistently with Once the enterprise has well established lean
the drop in demand. practices, it should extend the same to its suppliers
It has been often misunderstood that Lean can be to bring out a lean supply chain. Although this
practice is business model dependent, the companies
applied only to manufacturing setups. Lean as a
which have most of their manufacturing work
philosophy is applicable across industries, what is
Best Practice
outsourced to other firms must begin the process of
required is the knowledge and application of core improving the extended value stream much earlier
values of lean principles. than vertically integrated companies.
Jigyasa IIPC, NITIE Mumbai
8. 8
Innovation and R&D for SMEs in India
Kushagra Sagar, IInd year PGP NITIE kushagra.nitie@gmail.com
In India, small and medium industries play a vital scenario of liberalization and globalization. Indian
role in the growth of the economy. Small industries SMEs are finding it difficult to sell their products in
have a 40% share in industrial output, producing the domestic and international markets because of
over 8000 value-added products. They contribute increasing competition their conventional product
nearly 35% in direct export and 45% in the overall range. It will, thus, encourage exports and global
export from the country. They are one of the integration and propel SSI
Although biggest employment-providing sectors after
Financial issues
agriculture, providing employment to 28.28 million
Indian SMEs people.
The non-availability of institutional finance on
affordable and easy terms is hindering access to new
realize the technologies. In India the situation is further
Importance of Innovation
importance of Innovation has always been the hallmark of small
complicated by the fact that the preferred mode of
finance is either self or other sources.
innovation, and medium enterprises. SMEs that integrate
innovation can reap significant benefits. Studies Sources to overcome financial barrier
most of them conducted by US Department of Commerce, Innovation in developing countries is promoted by
revealed that since World War II, 50% of all
still believe in innovations and 95% of radical innovations, have
venture capital, to help in indigenous development
of technologies. In India financial institutions, such as
importing come from new and smaller firms. The innovation Industrial Development Bank of India (IDBI),
process is seen as a cycle involving trial and error, Industrial Credit and Investment Corporation of India
technology, where problems, at some stage of development (ICICI), Industrial Finance Corporation of India (IFCI),
rather than lead to the need for reevaluation of the earlier and other banks are providing financial assistance,
stage of the innovation process. for commercialization of indigenously developed
developing technologies and adoption of imported technologies
Although Indian SMEs realize the importance of
them in-house technological innovation, most of the Indian SMEs
for wider domestic applications through venture
capital.
still believe in importing technology, rather than
or in
developing them in-house or through/in Small Industry Development organization (SIDO)
association association with, national Research and offers a number of financial services to SMEs. Some
Development (R&D) centers. Indian SMEs, over the
with, national years, have largely ignored their R&D and have
of its the popular schemes are Credit Linked Capital
Subsidy Scheme for Technology Up-gradation, Credit
R&D centers. mostly not embarked on new product development Guarantee Scheme, ISO 9000 / IS 14001 Certification
and technological up-gradation. This is despite the Reimbursement Scheme, Integrated Infrastructure
fact, that India has the third largest pool of Development Scheme, Cluster Development program
technologically trained manpower. , Mini Tool Room Scheme etc.
Barriers to innovation for Indian SMEs Steps taken by Government
India has nearly 3 million SMEs, which produce a i) SED Bill: The Small Enterprises Development (SED)
diverse range of products from very basic to highly Bill is on the anvil. Enactment of this Bill will remove
Innovation
sophisticated products. Despite their strength, the barrier to SSI growth, by inculcating a hassle free,
SMEs are facing tough challenges in the present user-friendly environment enabling SMEs to diversify
Jigyasa IIPC, NITIE Mumbai
9. 9
from their conventional product range. It will, thus, Mechanical Engineering Research and
encourage exports and global integration and propel Development Organization (MERADO), National
SSI towards the projected 12 % targeted rate of Small Industries Corporation’s (NSIC), and Asia
growth. Pacific Center for transfer of Technologies
(APCTT).
ii) Credit Rating Scheme: The scheme has been
Current scenario in India
introduced to encourage the SSI Units to get their
At present, there are 2900 R&D institutions in
credit rating done, by reputed third party credit
India, of which 1350 are in the private sector. Out
rating agencies. The credit rating will facilitate hassle
of these, over 1250 are in-house R&D units,
free flow of credit to SMEs, while enhancing the
employing over 45,000 personnel. However, the
comfort-level of the lending banks. Government of
SME sector is largely aloof of such facilities. In the
India will reimburse 75% of the fees charged by the
majority of the cases, the R&D outputs do not get
rating agency subject to a ceiling amount.
commercialized for want of initial investment and
iii) SME Fund: Small Industries Development Bank of the needed enabling environment and
India (SIDBI) was set up in April, 1990 under an Act of networking.
Parliament. SIDBI is the principal financial institution Managerial issues
for promoting, financing and development of The Indian industrial environment was
industries in the small-scale sector. To further traditionally identified by its regulative and
improve credit availability, a SME fund of $ 2 billion protective characteristics. Till, 1990, the Indian R&D outputs do
has been operational from the year 2004. economy was inward looking and protected from not get
internal and external competition. In the absence
iv) Credit cards: Laghu Udyami Credit Card (LUCC)
of competition, firms did not develop the commercialized
Scheme (Small Entrepreneur’s Credit Card) has been
technological capability needed for penetrating
liberalized. The credit limit has been enhanced from
the global market. Decades of long protective
for want of
$4000 to $20,000 for borrowers who have a
satisfactory track record.
environment also reduced the risk taking capacity initial
of the SME manager and made him complacent
Technological issues and averse to risk. SME manager chose to avoid investment and
Technology is the key to enhancing a company's risky situations and thus blocking the dawn of the needed
competitive advantage in today's dynamic innovation.
information age. SMEs need to develop and Conclusion
enabling
implement a technology strategy in addition to SMEs are sometimes less aware of global environment.
financial, marketing and operational strategies, and standards, they only think about local
adopt the one that helps integrate their operations competition. It is imperative to have a shift in way
with their environment, customers and suppliers. of thinking. In term of investment many foreign
companies are at the door, so SMEs should
Organization supporting SME in technology
concentrate on upgrading their product so that
development
there will be longer relationship with those MNCs.
As technology is an important element, along with
Government also plays an important role, Indian
price and quality in determining competitiveness,
government will have to act in same manner what
many organizations are active in the area of offering
China had done 30 years ago- implementing SME
technological assistance to SMEs, including the
innovative idea at national level thus encouraging
Council of Scientific Research (CSIR), Indian Institute
SMEs for innovation.
of Technology (IIT), Technology Information
References
Forecasting and Assessment Council (TIFAC),
1. www.niscindia.com
Innovation
National Research and Development Corporation
(NRDC), National Institute of Design (NID) Product 2. www.ciionline.org
and Process Development Centers (PPDCs), 3. www.laghu-udyog.com
4. www.innovation.com
Jigyasa IIPC, NITIE Mumbai
10. 10
Latest trends in ERP and its interventions for SMEs
Amit Singhal, Ist year PGP NITIE amitmail85@gmail.com
Enterprise Resource Planning (ERP) calls for ringing in the market was, Can everyone afford
constant modifications and up gradations. ERP it.? The answer was a stubborn no initially but
developers are facing tremendous pressure ERP's and ERP applications designed for SMEs
both from vendors and companies. In this have successfully overcome the above
context it becomes important to analyze the limitations.
ERP's trends and modalities.
Some relevant issues concerning ERP for SMEs:
Need based applications Evolution of ERP in SMEs:
Organizations had to implement ERP ERP was a term restricted purely to elite class.
throughout their systems irrespective of the This scene was witnessed in the IT market for
fact whether they help in all the functions or some long time ever since ERP was introduced.
ERP was a very in one particular function. This became a big The large organizations went ahead with ERP
hurdle to the firms and main disadvantage of process unmindful of the negative
costly affair. ERP. They had to purchase the whole consequences of not non-inclusion of SMEs, not
Thanks to the applications even if it meant that most of to forget mentioning the fact that they took
them would be idle except for the core every proactive measure to curb the same.
intrusion of function. Needless to say ERP firms were also interested
internet and The latest ERP software programs have in serving such large players. So ERP for SMEs
overcome this menace. They offer need based remained a mere dream.
open source applications. The firms need not be worried
applications, even if these software programs were not ERP Vendors and Corporate giants:
available. They were given the liberty to It so happened that the number of larger
SMEs could purchase and install software programs companies without ERP turned out to be nil,
enter the pertaining to that particular function. This has thanks to the awareness created by vendors and
helped to increase the scope of ERP not only IT researchers. No doubt companies were
market of initially a hesitant lot and apprehensive on just
among large firms but among SMEs as well.
prospective ERP's intervention in SMEs
hearing the word ERP. However the industry
proved them otherwise. Then came a stage
buyers. ERP was a very costly affair. Thanks to the
where a company could not exist but without
intrusion of internet and open source
ERP. Even if their performance was satisfactory
applications, SMEs could emerge as
they were not able to gain any competitive
prospective buyers. This has not only widened
advantages.
the horizon of SMEs but also increased ERPs
The story of how goliaths adapted to ERP has lot
usage among large firms.
of significance in studying their interaction with
These large firms were not able to invest huge
SME. These bigger companies were not
money in spite of adequate funds. ERP for
providing the required business to ERP vendors.
small business calls for voluminous
Trends
Even though there are many big companies the
investments. But the question that kept
number of vendors was always greater in
Jigyasa IIPC, NITIE Mumbai
11. 11
multiples. This means only the best could strike they took such a long time to get implemented
deals and there was no possibility for mediocre and set the whole process into action. Since
or average vendors (in terms of this resource was spent excessively there were
performance).The best players also found that chances for reduction in potential business and
they had none to serve after a point of time losing man-hours.
because almost every company in the market The current day ERP applications are less
successfully established ERP (whether on the complex to install and train. This has reduced
first or further attempts). the amount of time.
Stabilization of ERP in SMEs: Open Source, Web enabled and wireless
So they had to naturally look for greener and technologies
fresher pastures. SMEs were the only answer. These are three important elements that have
The next question was how to provide best rejuvenated the functioning of ERP. Open
services at an affordable cost and still make Source ERP has done away with the hassles of
profit. In this case the vendors had to be paying license fees not only during installation
but also whenever a modification is made. The With basic ERP
worried only about the number of sales they
could make and not the quantum of profits companies are relieved of depending on ERP software,
because the number of vendors was few and vendors even for minor modifications.
tailor-made
far between when compared with the number Web enabled ERP helps in making the
of SMEs choosing to go for ERP. enterprise operations go online. Any system is
As it goes "necessity is the mother of Invention" stakeholder or third party can access the being sold by
vendors had to devise cost effective required information very easily and that too
by sitting anywhere in the world. This proves
ERP
applications to meet the demands of the SMEs.
This was the origin of ERP for SMEs. This to be of great asset for distributed companies companies.
benefited them in terms of business. On the and more so during emergencies when the
details are to be sourced immediately.
ERP vendors
other hand the SMEs enjoyed greater benefits
by making use of this application. Wireless ERP is sharing enterprise information
are speeding-
In fact, the latest trend is that with basic ERP through devices like internet and other devices up to integrate
software, tailor-made system is being sold by making it possible for outsiders to access the
same. It has helped organizations to make use
most of these
ERP companies. ERP vendors are speeding-up to
integrate most of these additional capabilities. of the communication channels effectively and additional
efficiently. It has made it possible for many
This type of customized or tailor-made capabilities.
enterprise system is easy to install and elements to operate in ERP which were
implement for SMEs. It also takes less time to otherwise not possible.
implement and chances of implementation Conclusion
failure are lesser. ERP trends reflect positive signals for the ERP
Hence, SMEs are becoming the popular choice vendors and companies availing their service.
of ERP vendors. There is an increasing It is important to remember the fact that both
awareness of ERP in SME market. It has the vendor and the company will be able to
practically helped to unravel the myth that ERP make use of any advantage (including the
is exclusively meant to business empires. modern facilities) only through proper
coordination, teamwork and nurturing a
Trends
Reduction in implementation time
cordial atmosphere. Mere IT ERP trends will
ERP was discouraged by companies because
not help in this aspect.
Jigyasa IIPC, NITIE Mumbai
12. 12
SMEs working capital management
Rohit Kumar, Ist year PGP NITIE rohitkumar836@gmail.com
Working Capital (WC) is considered to be the
Reducing the cash conversion cycle to a
life blood of an organization. If properly
reasonable extent increases firms’ profitability.
managed and nurtured, the business prospers
Firms can improve their profitability by
and grows; else it tends towards financial
reducing the number of days accounts
distress. Maintaining high inventory levels
receivable are outstanding and by reducing
reduce the cost of possible interruptions in the
inventories. This can be done by proactively
production process. However it strains the WC
reminding customers of upcoming payment
in terms of holding costs. Next, granting trade
deadlines.
credit favors the firm’s sales. But, granting
Management can use decreasing demand for
excessive trade credits above a limit may again
products to reduce inventories so as to offset
be harsh on the Income Statement of firms.
low demand. Companies whose performances
Managing this fine balance, for the inventory
remain strong can use WC strategies to solidify
as well as for the ‘trade credit’ becomes even
their financial positions.
If the company more important when there is a liquidity
According to a Harvard Business Review
is pushed to a crunch in the economy as sharp decreases in
research, companies that master the delicate
sales can greatly limit available cash. Even in
cashless balance between cutting costs to survive today
the post-slowdown recovery period, cash WC
and investing to grow tomorrow do well after a
bankruptcy- improvement should be more important than
recession. These companies reduce costs
companies concentrating on topline or bottom
like situation, selectively by focusing more on operational
line growth. If the company is pushed to a
efficiency, even as they invest relatively
what good cashless bankruptcy-like situation, what good
comprehensively in the future by spending on
would be huge topline or bottom line growth?
would be huge marketing, R&D and new assets.
WC management is particularly important in The pinnacle of WC management is achieved
topline or the case of startups and SMEs. Most of these when companies work on negative WC. Costco
bottom line companies’ assets are in the form of current USA, a membership only warehouse club retail
assets. Also, short term debt is one of their chain perfected this model. You need to be a
growth? main sources of external finance which is member to use their service by paying an initial
reflected on the balance sheet as current sum. They accept only cash or debit card,
liabilities. The management of WC involves which gives them instant cash. However they
managing inventories, accounts receivable and get goods from suppliers on a credit for certain
payable and cash. The goal of WC number of days. Thus they generate negative
management is to ensure that a firm is able to working capital which gives them enough cash
continue its operations and it has sufficient for business expansion. Thus they are able to
ability to satisfy both maturing short-term sustain on wafer thin profit margins. No
debt and upcoming operational expenses. wonder they say “Cash is King.”
Think
References
1. http://hbr.org/2010/03/roaring-out-of-recession/ar/1
2. BCG Report: Winning in a downturn Managing Working capital
Jigyasa IIPC, NITIE Mumbai
13. 13
World around SMEs
News Desk, Jigyasa
SME Exchange: India debates, China begins Google puts SME plans on dashboard
China opened its SME stock exchange and in In a bid to tap a bigger pool of small and medium
comparison, India’s plan for a similar exchange is just businesses on the Internet, online search giant Google
beginning to sprout despite making early moves. has added a new feature to its existing local business
Known as Growth Enterprises Market, the exchange center (LBC). The new dashboard feature will provide
will be run by the Shenzhen Stock Exchange and on businesses with new visibility into the ways their local
October 23rd, the first day of the new board it had an listings are found on Google, enabling them to make
initial batch of 28 companies listed and available for smarter decisions about attracting customers.
trading.
"Businesses will now be empowered with information
The market regulator SEBI has already floated the on how their listing is being searched and from where
concept for setting up the exchange which will enable - trends that will enable businesses to make informed
SMEs to raise capital from the primary market. “SEBI is decisions to reach out to potential customers," said
working on it. The norms are being finalized and Manik Gupta, product manager, Google India. "This
would be released soon,” Finance Ministry sources feature is a boon for businesses that do not have a
said. The exchange will help small enterprises that website of their own but want to use the Internet for
could not fulfill the trading requirements of the BSE doing business," added Gupta.
and the NSE, raise capital, sources said. The BSE, NSE
and the new entrant MCX Stock Exchange (MCX—SX) Report says over 50 per cent of missing SME units in
have shown interest in setting up a SME exchange. Ahmedabad
Bhushan Steel plans SME Steel Park at Orissa It is difficult to trace out the whereabouts of a large
number of small and medium enterprises (SME)
Bhushan Steel Ltd (BSL) has requested permission registered in Ahmedabad district if the official figures
from the Orissa government for establishing a ‘SME released by the State Industries Commissioner’s office
Steel Park’ around its 3mtpa steel plant being set up are to be believed. The figures of the nowhere-to-be-
at Meramundali in Dhenkanal district at an investment seen units in Ahmedabad are half of such units in the
of Rs5828 crore. According to informed sources, the state.
company has sought 1,000 acres of land for the
proposed SME steel park, of which 200 acres will be While the state has projected 12 to 14 per cent
earmarked for local downstream units. BSL will also growth in the SME sector during the Eleventh Plan
provide the raw materials, infrastructure support, period (2008-13), skeptics say a large number of the
assured power supply and marketing support to the 22,745 missing units in Gujarat (12,864 in Ahmedabad
units proposed to come up in the steel park. alone) existed only on paper to get official benefits .
In response to the company’s request, the state The report on the registered micro, small and medium
industries department has asked it to submit a enterprises (MSME) of Gujarat reveals that as per the
combined application form and detail project report provisional results of the Government of India’s
(DPR) to the Industrial Promotion and Investment Fourth Census as on March 2007, out of 2.30 lakh
Corporation of Orissa Ltd. units in the state, 34,945 units have been shut down
and 2,29,756 were found functioning.
Jigyasa IIPC, NITIE Mumbai
14. 14
U
World around SMEs
Banks enhance SME focus PE funding for SMEs
IDBI Bank has taken an initiative to strengthen its base Whatever funding happens for MSMEs, it is late-
in the mid-corporate, SME and retail sectors. stage funding, when risks for the investors are less
"Pursuant to formation of a dedicated vertical for SME than at the time of founding of the company. “And
customers, the bank has plans to set up 40 City SME whenever they have been realized, it's the larger
Centers (CMCs) out of which 15 have already been set players who have benefited," said Ramesh Kumar,
up." MD and CEO, Zwirn Pragati Capfin. So what ails PE
Axis bank has now realigned its business into four funding in MSMEs?
strategic business units (SBU). The four new SBUs of
"Lack of awareness is a primary issue," said
the bank now are retail banking, SME and agriculture,
Chandrakant Salunkhe, president, SME Chamber of
corporate banking, non-banking retail subsidiaries and
India. Moreover, any proposal from an MSME is
corporate center. Retail banking, along with SME and
looked at with skepticism because of a lack of
agriculture, will be headed by Mr. S K Chakrabarti. Mr.
business plan and transparency. Harsh Kaul, CEO,
Chakrabarti was earlier the ED in-charge of mid-
Sidbi VC, said given the stringent norms, only 10% of
corporates and SME. Unlike other banks where retail
the MSME units will qualify for funding.
and SME are under a same person, this was not the
case in Axis. The move for SBUs will help bring in more The trend of launching private equity (PE) funds to
business focus into these units. invest in SMEs is catching on in India. IndiaCo
Ventures Ltd, a Pune-based wealth advisory and
POSCO opens SME promotion center investment firm, is planning to launch an offshore PE
POSCO has opened a promotion center in one of its fund that will primarily focus on SMEs. The road
overseas SCM offices in Thailand in order to support show for the fund is scheduled to start in the first
small and medium enterprises' overseas operations week of December. IndiaCo plans to raise nearly
Mr. Hwang said in his congratulatory speech "I hope $500 million from Europe and West Asia.
the new promotion center will be a foundation stone
SMEs take to tele-conferencing
upon which both major corporations and SMEs can
build up trust in their relationships to help each other In today’s competitive environment, organizations of
succeed in overseas markets." all sizes and across industries are trying to contain
Another promotion center for SMEs opened at the costs without limiting their ability to execute and
second plant of POSCO-IPPC in the Indian city of Pune. innovate. Unified communications (or UC, such as
The goal of this center is to help Korean SMEs to play tele-conferencing and video-conferencing) is no
a part in the now booming auto industry in the area. longer restricted to large enterprises.
Meanwhile, POSCO plans to expand the facility to Anshul Dhingra, senior marketing manager, Polycom
other countries if the two turn out to be a success not (India & SAARC), observes, “SMEs have been
only at helping SMEs doing overseas business but also enjoying the benefits of UC solutions to collaborate
at creating new demand for it by locating upcoming with various stakeholders. Voice conferencing has
centers in industrial complexes that contain found application across the SME segment. With
processing centers. increased awareness about the vast benefits of visual
collaboration solutions, the SME market is fast
adopting this technology as well.”
Jigyasa IIPC, NITIE Mumbai
15. 15
Seminars, workshops, training sessions for SMEs and NGO Melas conducted by IIPC, NITIE over the period
Jigyasa IIPC, NITIE Mumbai
16. 16
NITIE, Mumbai
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Jigyasa IIPC, NITIE Mumbai