Presentation abhishek kishore

22
Policy recommendations on the Small and Medium Enterprises of India

Transcript of Presentation abhishek kishore

Page 1: Presentation   abhishek kishore

Policy recommendations on the Small and Medium Enterprises of India

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A few facts about India

Labor Force Composition: Agriculture: 53% Industry: 19% Services: 28%

GDP Composition Agriculture: 17% Industry: 18% services: 65%

Total GDP: $4.784 trillion

GDP per capita: $3900

40.4% of the population in the age group of 25 – 54 years

Second Largest Population of the World : 1.2 billion

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Manufacturing Enterprises – Investment in Plant & Machinery

Description INR USD($)

Micro Enterprises upto Rs. 25Lakhs upto $ 62,500

Small Enterprisesabove Rs. 25 Lakhs & upto Rs. 5Crores

above $ 62,500 & upto $ 1.25million

above Rs. 5 Crores & upto Rs. 10Crores

above $ 1.25 million & upto $2.5 million

Definition of Micro Small & Medium Enterprises in India

Service Enterprises – Investment in Equipment

Description INR USD($)

Micro Enterprises upto Rs. 10Lakhs upto $ 25,000

Small Enterprisesabove Rs. 10 Lakhs & upto Rs. 2Crores

above $ 25,000 & upto $ 0.5million

Medium Enterprisesabove Rs. 2 Crores & upto Rs. 5Crores

above $ 0.5 million & upto $1.5 million

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According to the Indian Ministry of Micro Small & Medium Enterprises

Micro Small and Medium Enterprises Growth Rate

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1.2 Billion people

Nearly half under 25 years of age

Only 16% report owning their businesses

The Reality – Gallup Report

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Where does India stand?

Economy Name RankProcedures

(number)

Time

(days)

Cost (% of income per

capita)

Paid-in Min. Capital (% of income

per capita)

New Zealand 1 1 1 0.4 0

Indonesia 166 9 47 22.7 42

Niger 167 9 17 112.8 572.8

Comoros 168 9 20 150 261.9

Ecuador 169 13 56 29.9 4.5

Central African Republic 170 8 22 172.6 444.1

Angola 171 8 68 105.4 24.6

Guatemala 172 12 40 48.1 20.9

India 173 12 27 49.8 140.1

Bolivia 174 15 50 74.1 1.9

Cambodia 175 9 85 100.5 28.5

Côte d'Ivoire 176 10 32 130 184.6

Iraq 177 10 74 81.1 25.2

Suriname 178 13 694 110.9 0.4

West Bank and Gaza 179 11 48 91 206.7

Congo, Rep. 180 11 161 55.3 80.5

Chad 181 9 62 202 289.4

Equatorial Guinea 182 18 135 98.2 11.7

Eritrea 183 13 84 52.3 203.1

Haiti 183 12 105 286.6 21

Djibouti 185 11 37 150.7 383.6

“Doing Business Project” Ranking data June 2012

http://www.doingbusiness.org/data/exploretopics/starting-a-business

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Let’s come to the basics

68.7% of the Indian population lives under $2 a day.

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Lack of reliable and efficient government

support structure

Lack of access to mentorship and

training opportunities

Lack of easy access to funds

Failure considered to be

a taboo

Issues hampering the growth of SME’S

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Bottlenecks in the existing system

Slow growth in the SME sector

Fragmented distribution

network

Low penetration of

financial services

Lack of power/energy

(electricity)

Lack of water supply in the

farm areas

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Top constraints reported by South Asian benchmark firm in the urban formal

sector – Electricity wins!

Electricity has been reported as the top constraint hampering the growth of businesses

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Current Water Situation in India

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Demand is more

India’s current water

supply: 740 billion m3

Future Projections for Water

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Low Penetration of Financial Services

Only 40% of the total population have bank accounts

The lighter the color the lower the bank branches

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Percentage of firms with credit line or loan from a financial institution

Low penetration of financial services is visible in the percentages

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Fragmented Distribution Network

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Key Issues in India Distribution Network

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Focused policy in the form of a National Support Program for the next ten years to support SME’s in creating nationwide distribution networks

The National Support program to be headed by Industry leaders and practioners having the know how and expertise

This should be done in mind with an aim to create sustainable infrastructure for future generations to use

Recommendations

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Expand the reach of banking sector and the flow of money to the rural area and Tier II – III city entrepreneurs by opening up the banking sector for public private partnership

Mobile technology should be leveraged to reach the remote areas for financial inclusion

Recommendations

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Leverage the abundant natural resources India has in its different states, like wind in the coastal regions, solar in Rajasthan, to supplement its power generation.

Reduce T&D losses by laying underground wiring

Reliable and continuous supply of power to businesses in the Tier II – III using renewable sources will help in the growth of SME’s

Recommendations

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The use of established water management techniques such as watershed management, rainwater harvesting, river interlinking and desalination should be expedited

An independent regulator should be appointed to control and coordinate implementation efforts

Strict legislation should be instituted for the exploitation of groundwater

Recommendations

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Focused policy for a complete paradigm shift of the government departments to work as enablers and facilitators to help the public

The red-tapism and the shylock image of the government has to be shunned at the earliest.

Primary Recommendation

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THANK YOU