Economic Upturn for MSMEs in India is round the corner, reveals CII survey


Future MSME Outlook :

The positive sentiment built up in the second quarter of 2009 - 2010 is expected to carry forward into the third & the fourth quarter of 2009-2010, as revealed by the MSME Outlook survey.

An assessment of the expectations of the MSMEs for the third quarter (October December) of 2009 - 2010, further revealed that , 54 percent respondents expect an increase in turnover , 43 percent respondents expect an increase in production and 45 respondents expect an increase in their order bookings. Also 31 and 37 percent of respondents expect an increase of their export and profitability, respectively, vis-a-vis the second quarter of 2009-2010.

Finally an analysis of the expectations of MSMEs in the last quarter of 2009- 2010, revealed that 51 percent of the respondents expect an increase in their turnover, 43 percent of the respondents expect in their turnover and 40 percent of the respondents expect an increase in their order bookings.

Factors inhibiting the growth and development of MSMEs in India

As part of the MSME Outlook survey, an analysis of various factors that inhibit the growth and development of MSMEs in India, revealed that the Ten (10) key issues, that entrepreneurs found as the major impediments to their growth, in order of decreasing priority are Delayed payments, High cost of credit, Lack of availability of credit, Absence of Government support for growth, Lack of availability of risk capital, Complex indirect tax structure & lack of understanding on the forthcoming GST, Norms for collateral/margin requirements, Infrastructure bottleneck, Absence of preference for being a part of the supply chain for the Government, Compliance with labour laws, Non transparent credit appraisal norms and Lack of usage of Information and Communication Technology (ICT).

Mr Salil Singhal, Chairman, CII National MSME Council observed that it appears that the worst of the crisis period is over and a turnaround seems within sight for most of the industry. He added that CII had submitted a Development Agenda for the Indian MSMEs, to Dr Manmohan Singh, Hon'ble Prime Minister of India. This was followed by the constitution of a High Level Task Force force, under the Principal Secretary, in the Prime Minister's Office (PMO), to look into the issues being faced by the MSMEs.

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