Our MSME sector is blatantly unorganized. The percentage of organized players that we see is
just the tip of the iceberg. This ensures that the subsidies, benefits and
schemes reach only a handful of enterprises. A lot needs to be done and can be
done in this regard and should be done. However, it “helps” to keep the sector unorganized (especially when many of the
players themselves do not appreciate the need to be part of a greater whole for
unethical issues like tax saving and circumventing the legal and statutory
system). Why does it help? Because
then these millions of small players do not have a voice! A voice that can
create a lobby and influence policies and laws! When there is no organization,
there is no identity or force to make their presence felt. An isolated
enterprise is “a nobody”! Whom does it
help? It helps the government and its administrative arms, the banks and
financial organizations and the large companies.
A rape case created national level stir,
people came together and the law was influenced. Therefore, it
can be done provided there is an intent and unity among the MSMEs. Remember, it is not for nothing that
it is said that the economy is driven by
the MSMEs sector and that the MSMEs
sector is the engine of growth and so and so forth.
Another issue is the lack of financial support or inadequate/ inaccurate support to the
MSMEs.
It is evident that MSMEs survive by themselves
without any structured support. Even if there is any support, it is either too
complex or simply inadequate. MSMEs deserve credit because they are the true
fighters, foot soldiers and survivors, who actually face the enemy in the eye
at the ground level in battle terms. A battle is not won by crafty strategies
but when the soldiers on the ground engage with the enemy one on one and
prevail. These same MSMEs when they reach the large scale state or become financially
more viable by taking own risks; become the darling of the financial firms who
swoop down to support them with funds and schemes. When does a child need
support? – In the formative years or when they are old enough to fend for
themselves? If enterprises are identified and segregated appropriately then the
action to help them can be more focused and effective.
And
who gets the bulk of the financing, benefits and sops? The large companies; who are already financially
more secure and capable, who have larger “fashionable” overheads in the name of
employee motivation and retention, who employ a mere percentage of the entire
available working population! It is these companies who bank on the MSMEs to be
their suppliers and prey on their costing, pricing and credit period for a
better financial performance. And before
someone points out the MSMED Act 2006 to me, let me again remind the reader to
read the first line of this article.
The economy is not shaky because of global tremors;
it is shaky because our fundamentals are not strong enough. We are not focusing
on the plinth while constructing lofty buildings in thin air. The government
talks about the glowing economy using all possible management jargons and how
the large companies are pushing ahead India’s growth story while it is actually
the MSMEs who are creating job opportunities for the masses and propelling
conspicuous purchases, supplying goods to the large companies and helping them
maintain a low inventory level, and still remain revenue generators, pay taxes.
I am sometimes astonished at the excessive awards
function by media houses and other brands celebrating and recognizing
“contribution to society”, “success in business”, “innovation” etc of large
entities with their glowing faces pasted on the entire range of media from
print to TV to the web; the bankers and the CEOs and owners of large companies
hobnobbing together in these “social dos” with the clichéd “I scratch your
back, you scratch mine”. Do they ever talk about or recognize the contribution
of the MSMEs on whom they lean for their support? Are these MSMEs ever
acknowledged? The same small enterprise that is actually instrumental in their
growth and performance!
I sincerely implore the banking celebrities and
financial think tanks to sit alone in front of a mirror, keeping aside their
masks and honestly tell their own selves are they really doing anything for
MSMEs? Are they really taking risks, going out of their comfort zone? Is there
honestly no solution for the MSMEs? Maybe one person will stand up to create a
difference and that it all it takes to change the rules of the game, to bring
transformation, to create a new future, for good, for better.
I believe that the most important step today should be to enlarge and broaden the definition
of MSME in the country. Countries are categorizing (as shown earlier) on the basis of capital investment, number of
workers/ employees, turnover/ balance sheet figures, type of industry or
business. There are even variations based on ownership and decision – making.
This is also a pertinent factor. A bigger question is why there is a need to
stress on the definition of SME? How will an enterprise benefit in India? A
definition would justify why such businesses need support both from the
government as well as banks and financial institutions, why they need tax
breaks and how much support do they need for how long and on what concerns
should the benefits be removed. The idea
is to foster SME growth so that “they can fish and eat”. Proper definition
will help develop more tailor made policies with better results and outcome.
Which SME to support and why? How do we evaluate them? What should be the criteria?
For e.g. – A product that is a crucial raw material
for another business is often bought by full down payment. Contrast this with
another product which needs to extend a long credit period since it is not
supplier specific or having any patent or uniqueness. Do both enterprises
require same kind of support?
In any economy, MSME are the flesh and blood. They
are life! Nurture them and they will sail all by themselves and take many more
on board. Today, the need to redefine MSMEs has become grave and significant.
Business is extremely complicated with too many forces at play simultaneously.
We require a broader definition with specific provisions for industry – wise
characteristics, location, product etc. A time bound program with serious
involvement of actual enterprises from the entire cross-section of industries
and associations (apart from government agencies, lawyers, chartered
accountants, economists) should be created to come out with a comprehensive
definition and description.
It is an opportunity for India to bring about
innovative definition of the sector and not blatantly emulating what the world
does. Let us break new grounds, be innovative and transformational in our
definition such that the world emulates us. Let us become trailblazers for
once!
Patrick Warburton said - I
do believe that we have the opportunity to continue - I repeat myself over and
over again with this - to redefine and reinvent ourselves and as long as we do
that, then I think we've got some pretty good odds in our favor, because we're
not always presenting the same thing.
