SME Survey: Not just new schemes, govt needs to ensure cos know about them

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When it comes to small and medium enterprises, it is not just enough that the government introduce new schemes for their benefit, it is equally important that it ensures the industry is aware of them. The Firstbiz-Greyhound Knowledge Group survey of SMEs found that most small companies are unable to take advantage of government initiatives launched for them either because they were unaware of them or because they didn’t work as they were supposed to.

So while the 540 respondents admitted that they faced difficulty when it came to raising funds for expansion, accessing the latest technology, marketing channels for their products and getting infrastructure, most of them also did not know that the government already had schemes in place to aid them.

When it came to raising funds, 71 percent of the respondents said that they weren’t even aware of the fact that the government already has a credit guarantee scheme to give them access to credit without giving collateral. But even among those who did know about the scheme, almost every one of them said they were unable to take advantage of the scheme since it was difficult to find information on the scheme from banks.

The government also has multiple schemes to gain access to the latest technology like the Technology Business Incubation which allows technical entrepreneurs to perform R&D programmes while receiving guidance. However, 90 percent of the respondents in this category said they didn’t even know of its existence.

Even when it comes to development of infrastructure for small enterprises, which routinely suffer from a lack of availability of electricity and waste disposal facilities, two government schemes meant to promote it are largely unheard of by their intended beneficiaries. While the Department of Industrial Policy and Promotion has the Industrial Infrastructure Up-gradation Scheme (IIUS) scheme, the Small and Medium Enterprises ministry has the Integrated Infrastructure Development (IID) scheme. Under both the schemes the government aids the installation of requisite infrastructure for small industries, but the survey found that around 90 percent of the respondents didn’t know about them.

Small companies also complain that they are constantly being muscled aside by bigger companies that have better access to marketing and supply chains, but while the government has initiatives like a marketing development assistance scheme, 89 percent organisations said they were unaware of it.

Expectations from the Modi government’s budget remain high. From easier access to credit, labour reforms and better infrastructure, small industries are hoping for a budget that will solve their problems. While Jaitley may be able to meet their expectations, he will need to ensure that they work better than what his predecessor’s schemes did.

You can download the complete report here

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