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CII Business Outlook Survey for MSMEs

21
Apr '08

The CII Business outlook survey (1st in the 2008 series) on Policy Impact and Future scenario for Micro, Small and Medium Enterprises (MSMEs) during January - March 2008 aims to capture in a nutshell the general prevailing mood in the MSME sector, while attempting to visualize the future of the Indian enterprises and prioritizing key policy initiatives for Indian MSMEs sector.

Repositioning of the Indian Small Industry:
An analysis of the survey findings revealed that 72 % of respondents feel that simplification of labour laws, 66 % respondents feel that promoting innovations while 65 % feel that regulatory changes as the top three key enablers for repositioning of the Indian Small Industry in the changing global scenario.

Procurement Preference Policy:
On the procurement preference policy front, 81% of surveyed respondents support the development of the Procurement Preference Policy for MSEs as statutory under Section 11of MSMED Act 2006, that makes it mandatory for all the Central Government Ministries/Departments, its aided institutions and Public Sector Undertakings, etc, and must be executed by all officials to whom procurement authority has been delegated.

Only 13 % of respondents are not sure about it and only 6 percent respondents have not responded to this question. Earlier the policy was non-statutory in nature having been issued by way of executive instructions and hence it was not enforceable by law.

Financial Obstacles:
THREE important financial obstacles to the growth and operation of the Small Industry, as revealed by the survey are:
- High Interest rates
- Collateral requirements of banks/Financial institutions
- Bank Paperwork/bureaucracy

Non Traditional Sources of Finance:
The poll findings further revealed that 43 % respondents of Small and Medium Industry foresee the dominant role of non traditional source of finance substituting the traditional (banking) sources.

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