The Financial Express

SME policy  

| Updated: November 02, 2019 21:56:56

SME policy   

The government reportedly is at the final stage of formulating the country's first ever SME (Small and medium enterprise) policy. No doubt an inspiring move, it might still cause a sense of unease to many in that the job seems quite challenging to have on board a vastly diverse array of small businesses called SMEs. In fact this could be one reason why it took so long to go for a policy framework to fit the varied and often disparate nature and types of SMEs in the country.

A FE report says the forthcoming policy emphasises expansion of skills development, education and training programmes for small and medium businesses including establishment of an incubation centre for grooming entrepreneurs as well as providing for collateral-free loans at single-digit interest. Also it envisages measures for simplification and rationalisation of taxation, investment and fiscal incentives for export-oriented SMEs. Intended mainly to empower these small and medium businesses, the focus of the proposed policy is to ease and enhance their access to six critical areas. These are: access to finance, access to technology and innovation, access to market, access to training, access to business support services and access to information. Among the other facilitating services provided in the policy include launching of SME Credit Guarantee Fund, product development programme, online procedures to ease business start-up etc. With all these, the policy aims at increasing the contribution of the SME sector to the country's GDP from the current 25 per cent to 32 per cent.

A policy, by all means, is no more than an expression of intent-- success of which depends on how meticulously and realistically it is framed, including the ways in which difficulties, if any, in its implementation are to be encountered. The country was in dire need of a SME policy mainly because despite their contribution to the economy -- particularly in domestic market supplies and employment -- these small units scattered all over the country in myriad shapes and forms are, for the most part, devoid of any proper direction. Moreover, although they are recognised for their potential for growth in both domestic and overseas markets, it is true that a majority of them are yet to shed symptoms of infancy. It is in this context that the SME policy is going to fill in a void.

It is heartening to know that the government, while framing the policy, has kept its eyes open to implement the policy provisions by suggesting the formation of National SME Development Council (NSDC) and National SME Task Force. As the highest policy-making body, the NSDC will be tasked to implement government's commitment to the development of the overall SME sector. It is expected that once the policy is approved, the stakeholders would find it convenient to work on SME development in a methodical manner.

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