Free SMEs from funding woes

Font Size

Print

Feedback

Email

Discuss

: The Federation of Indian Micro & Small & Medium Enterprises (FISME) came into being in 1995 to prepare Indian SMEs to the challenges thrown by the changed economic realities. On its agenda is, ensuring better credit facilities for small-scale industries, networking on a national and global scale and encouraging e-commerce. It also wants to ensure for SMEs better access to markets and market norms.

FISME works as an independent lobbyist with the government for over a lakh of SMEs that it represents. It visualises better understanding of the World Trade Organisation norms for SMEs. In a memorandum presented to finance minister P Chidambaram for Budget 2008-09, FISME has mentioned that, although exports during April-October this fiscal rose 20.9% to Rs 3.47 lakh crore ($85.58 billion), the export performance of most of the SME-intensive sectors has not been up to the mark. During this period, textile exports fell 22%, handicrafts 66%, leather 9% and marine products, almost 20%. All this, while the rupee has appreciated, interest rates have risen and higher inflation have impacted consumer demand, hampering growth of the sector.

It has mentioned that that the rising production costs and the demand for skilled labour have also led to stress for SMEs. The memorandum mentions that the credit-linked capital subsidy scheme (CLCSS), since the process of liberalisation started in 1991, leading to complete removal of quota regimes and de-reservation of a bulk of the sector, has been the only scheme that aimed to address SMEs’ needs for technological upgrade. The scheme came to an abrupt end on March 31, 2007. FISME’s main complaint has been that, in more than 1,000 cases where SIDBI signed agreements with SMEs under CLCSS, appraised projects and sanctioned loans, the small-scale industries were informed that there was no money left under the scheme. The implementation of the scheme, therefore, leaves much to be desired. FISME feels that the CLCSS scheme should be continued and cases in which funds have already been approved should be given.