“Govt. should give emphasis on promoting SMEs” [June 2012]

June 19, 2012 12:17 pm

National Manufacturing Policy proposes to increase the manufacturing growth to 12-14 per cent so that the sector can contribute 25 per cent to GDP by 2022. “To achieve the proposed target, the government needs to not only concentrate on large scale manufacturing but also in promoting SMEs”, – Manish Walia, Sr. Director, Industrial Automation Business Unit, Delta India Electronics
Boost investors’ sentiments The manufacturing sector in India can enhance economic development, increase the productivity and sustain the competition from the global markets. The manufacturing sector is labour oriented and India has considerable potential in offering cheap labour and a gigantic market for world goods and services. However, the country lacks in the infrastructure development which actually a deterrent to the expected growth of the manufacturing sector in India. Moreover, price pressures and power shortage continued to upset the growth. In the recent time, the industrial growth rate has drastically slowed down in India. “Boosting investors’ sentiments, both domestic and foreign, can help in enhancing the growth in the manufacturing sector”, believes Manish Walia, Senior Director, Industrial Automation Business Unit, Delta India Electronics.
Control inflation & interest ratesThe Indian industry is characterised by adoption of cost-effective, state-of-the-art manufacturing facility. Commenting on whether the industry is in right track of achieving manufacturing excellence, Mr. Walia said, “The adoption of advanced manufacturing technology (AMT) has enabled the industry to produce globally competitive products. The industry has made enviable strides to catch up with the latest hardware and solution technology”. However, India’s manufacturing sector has been struggling since last one year due to high inflation and high interest rates. “The 2 per cent hike in both excise duty and service tax in the recent budget would negatively impact the industry, particularly the SME sectors. Recently RBI has reduced the interest rates by 50 bps to heighten the industrial and economic activity. This has boosted confidence in the manufacturing sector”, shared Mr. Walia.
Focus AreasThe recent global economic crisis and continuous interest rate hikes to control the high inflation has adversely affected the pace of manufacturing growth. Emphasis should be on human-resource skill development, global competitiveness through technology up-gradation and foreign investments. The government’s plan to establish National Investment and Manufacturing Zones (NIMZ) can boost the manufacturing industry. The lack of capital for the SME sector is another major issue to be tackled efficiently. The SMEs should be encouraged through easy access to finance. Several small scale manufacturing units lacked human resource policies, skilled workers and adoption of quality tools. “Along with skill-development, we should also bring out standards and benchmarks for their processes and products”, Mr. Walia suggests. “Infrastructure development is another core issue to boost the manufacturing sector”.

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