The business fraternity has all the time had considerations that stay unaddressed, however the current state of affairs, so far as micro and small-scale industries (MSEs) are involved, is such that one wonders if this common pattern has hit a vital mass. In Peenya Industrial Area, practically 15-20% of over 16,000 MSEs have shut, in accordance to a tough estimate. If you survey all the MSEs State-wide, it’s possible you’ll discover the state of affairs much more alarming.
There are many causes for this, like hovering uncooked materials scarcity, rising labour prices, shortage of expert labour, harassment by officers, delayed funds and lack of well timed, enough and sustained governmental intervention.
Systemic issues
At the outset, we’ve to additionally acknowledge that the State government is indisputably well-intentioned. However, the drawback is extra of a systemic nature, and we want to transcend good intentions.
The Karnataka State Small Industries Development Corporation (KSSIDC), which is one in every of the dependable suppliers of uncooked supplies at inexpensive charges to the MSEs, has stopped supplying them for the previous practically two years now. The different supply — the National Small Industries Corporation (NSIC) — is seen to be irregular and unreliable, due to insufficient shares, and never customising the amount of provides wanted.
Labour prices have risen primarily due to inflation, the excessive worth of gasoline and bus/metro fares, the persevering with enhance in costs of important commodities and in addition excessive leases. Many individuals are reluctant to work in MSEs due to the IT tradition they usually demand excessive salaries as an incentive.
On prime of this, there may be a stark shortage of expert fingers. While the government has taken a lot of steps in the direction of talent improvement, it is going to take extra time for the outcomes to percolate to the floor degree, assuming that they are going to certainly repay.
Add to this, the thinning margins for a small entrepreneur due to excessive overhead prices, like frequent hikes in energy tariff, property tax, and excessive leases. The latter is maybe the largest disincentive as a result of practically 90% of the MSEs function in personal industrial areas as government industrial estates arrange by KSSIDC/ KIADB cater to barely 10% of the demand for industrial sheds/plots.
Plight of small entrepreneur
The government has repeatedly assured us that industrial estates shall be arrange in all districts and taluks, however there’s a large hole between assurance and implementation.
The odd citizen might be unaware of the sacrifices and the plight of the small entrepreneur. To give an instance, industries in Peenya had been instructed to shift to Greater Peenya Industrial Estate in Nelamangala as a part of efforts to decongest Bengaluru. Now, who would think about that an entrepreneur, with a settled enterprise, shoppers and staff, would agree to shift to a far-off place, as it might have clear repercussions on all these components that drive their enterprise?
But many agreed and shifted to Nelamangala, paying an exorbitant sum for allotment of an industrial plot, for which they borrowed closely at excessive curiosity. Even the allotment was delayed for years and their enterprise was nearly left excessive and dry for years! The state of affairs has improved now, however the state of infrastructure at Nelamangala is a far cry from what was dedicated to by the government.
Harassment by officers of the Karnataka State Pollution Control Board is one other frequent grievance. The MSEs are slapped with a discover on some or the different floor and the business proprietor is left to deal with such prickly issues at the value of the productiveness in his manufacturing facility.
Another perennial drawback is the delayed funds for provides made to PSUs, giant organisations, and so on. Despite government initiatives to ameliorate this example, delayed funds proceed to hang-out the MSEs and have an effect on their money flows and their backside line.
What govt. ought to do
The vital query to ponder over is: what ought to the government do to bail out the MSEs? The reply shouldn’t be in saying extra schemes however to tighten the implementation and monitoring mechanism in order that good intentions flip into actuality.
The greatest manner to enhance the implementation structure is to contain business associations in the monitoring mechanism. This has to be accomplished in mission mode and systemically, decreasing the scope for arbitrary human intervention, and at the similar time, permitting for artistic methods to deal with the grievances of the small entrepreneur.
(The author is President, KASSIA, and a veteran entrepreneur)
