Ahmedabad Management Association (AMA) in collaboration with Entrepreneurship Development Institute of India (EDII) organize this MSME Conclave 2018 under YES Bank’s CSR project “Say YES to Sustainable MSMEs in India”.
Dr. Ketan Patel, CMD, Troikaa Pharmaceuticals Ltd. highlighted importance of Quality , Consistency and Excellence for MSMEs. These would ensure long term success.
Welcome Address was given by Mr. Rajiv Mehta, President of AMA and BoA member of Accuprec Research Labs Pvt. Ltd. Mr. Rajkumar Beniwal, IAS, MD, iNDEXTb, Mr. Sudhir Prajapati, Chief Manager, Dena Bank, Ahmedabad, Mr. Paresh Gupta, Sr. Vice President, YES Bank talked about “Government Policies & Assistance”.
Padmin Buch, IPR expert and BoA Chairman of Accuprec Research Labs Pvt. Ltd. emphasized that innovation is also a key factor for MSMEs in today's competitive scenario. He said that companies like Troikaa have proved that innovation and quality carry great value and also commercial success. Mr. Navroz Tarapore, Chairman M.S.M.E. and Industrial Policy Committee, GCCI presented Vote of Thanks. More than 200 participants attended the MSME Conclave at AMA. The conclave was greatly appreciated by all.
Panel Discussion was held on the Entrepreneurial Journey: Issues and Challenges for Sustainable Development among following experts: 1. Mr. Rajiv Gandhi, CEO & MD, Hester Bio Sciences Ltd. 2. Mr. Ambar Patel, Managing Director, Shilp Gravures Ltd. 3. Mr. Abhishek Desai, Co founder, Digicorp Pvt. Ltd.
Theme address about the Conclave was presented by Dr. Jaimin R Vasa, MD, Vasa Pharmachem (P) Ltd. (Member, AMA Governing Council) and BoA member of Accuprec Research Labs. Highlights of his speech in his words:
If we consider the MSME in International level the most widely used variable for defining an MSME is the number of employees, followed by turnover and assets. There are about 162.8 mn formal MSMEs, employing more than 508 mn employees. Out of this, about 96.3 mn MSMEs and 231.4 mn employees operate in emerging markets.
Globally, MSMEs have registered a growth rate of around 5.2% annually since 2000. The lower-middle-income economies (for example, in the Europe and Central Asia region) have the highest growth rates of MSMEs. Formal MSMEs account for a median share of employment totaling 67.1%. MSME’s contribution to employment in high income economies surpasses 65%, while in upper-middle income economies it is about 60% and in low-income economies it is approximately at 75%.
There are 42.50 million, registered & unregistered MSMEs in India. A staggering 95% of the total industrial units in the country. This sector Employs about 106 million, 40% of India’s workforce and Currently around 6.11% of the manufacturing GDP and 24.63% of Service sector GDP. After the implementation of the GST 40% MSME sector also applied GST Registration which increase the government revenue by 11%. India produces about 1.2 million graduates per year. And, there is no economy in the world that can provide jobs to so many fresh graduates in one year. MSME is the boon for many of these fresh manpower.
In Gujarat there are approximately Four lacs MSMEs and providing employment to more than 25 lacs people and this sector playing a noteworthy role in shaping Gujarat’s manufacturing sector. It is clear that if productivity in the SME sector can be increased by a few percentage points, there will be a large benefit to overall economic growth.
In the current business environment, MSMEs are facing a number of challenges:
First, industrial growth has been quite slow, which has hit small entrepreneurs hardest. Second non availability of adequate finance in time; then Global Competition; Marketing problems, sudden increase of Crude oil Price make the raw material costly and instability of Foreign Exchange Rate affect the import of raw materials as well as export of finished goods.
The recent Bank incidents has had a direct impact on SME finance, this hurts small businesses involved in labour intensive industries. Most of the Bankers fear taking commercial decisions that may later on be scrutinized through a law enforcement lens. Even if all the documents are clear then also Bank officials are not ready to take the decision.
As per the current guidelines of RBI, Bankers also mentioned the discontinuation of buyers' credit, or letters of undertaking (LoUs), for importers. The LoU ban has forced many small businesses to seek short-term credit instead, also need more approvals and come with higher interest rates.
In the face of these challenges and resource constraints, an average promoter of a small/medium business is forced to spend majority of his time in dealing with non-strategic administrative activities, statutory and regulatory compliances, unprepared day-today situations, fund management; dealing with customers and vendors, production and product delivery issues etc.
As I mentioned earlier, there are many leading industrialist like Shri Dhirubhai Ambani, Shri Karshanbhai Patel and Shri Pankajbhai Patel etc. who had started as a small enterprise and now they are successful Entrepreneurs. These successful Entrepreneurs who are under the prevailing circumstances find out their own way with innovative ideas and entrepreneur skill and overcome with many hurdles and challenges and now they were became large Enterprises. They are the learning institutions for us and we must learn many lessons from them. Dr. Ketan Patel, CMD, Troikaa Pharmaceuticals Ltd. is also like them who had started small firm and became a successful entrepreneur, who will enlighten us his success story and how he overcome all these challenges.
The Indian government is strongly supporting entrepreneurs across the country and encouraging the young minds to establish their own businesses. In view of its significance for the economic growth and poverty elimination, the Government of India has taken various initiatives to support the growth of MSMEs. Today Mr. Rajkumar Beniwal, IAS, MD, iNDEXTb is with us, who will give a brief details about the government initiatives and programs for MSMEs.
Without adequate bank finance, SMEs cannot acquire or absorb new technologies nor can they expand to compete in global markets or even strike business linkages with larger firms. Once finance is available, issues like use of technology, inefficient marketing strategy, constraints on modernization and expansion and manpower shortage can be handled to a great extent.
Even though the government has announced higher credit guarantee limit for MSMEs in 2017 apart from leveraging a plethora of various other schemes for such businesses, the sector has been heavily affected by the demonetization driving employment figures going down and reducing business. Post the inception of ‘Make in India’, a signature initiative by the prime minister of India, the process of incorporating a new business has been made easy. Since the MSME is the backbone in making this dream a possibility, the government has directed the financial institution to lend more credit to enterprises in MSME sector. Mr. Sudhir Prajapati, Chief Manager, Dena Bank and Mr. Paresh Gupta, Sr. Vice President, Yes Bank, with us to brief us various schemes introduced by Dena Bank and Yes Bank for MSMEs in line with the RBI guidelines.