Kalam on Indian SMEs
Rediff reports on the Indian President’s vision of a developed India, covering tourism, small-scale industries and rural development, excerpted from the inaugural address at the 23rd India International Trade Fair in New Delhi. Here is what he spoke about SMEs:
The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40 per cent of the gross industrial value added in the Indian economy. It has been estimated that the turn over to capital employed is approximately 4.62. The small-scale sector has grown rapidly over the years. The number of small-scale units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000.
The small-scale industry sector in India creates largest employment opportunities for the Indian populace, next only to agriculture. The SSI sector plays a major role in India’s present export performance. About 45 per cent to 50 per cent of the Indian exports are contributed by the SSI sector. Direct exports from the SSI sector account for nearly 35 per cent of the total exports.
Besides direct exports, it is estimated that small-scale industrial units contribute around 15 per cent to exports indirectly. This takes place through merchant exporters, trading houses and export houses. It would surprise many to know that non-traditional products account for more than 95 per cent of the SSI exports. The product groups where the SSI sector dominates in exports are sports goods, readymade garments, woolen garments and knitwear, plastic products, processed food and leather products.
The strategy for enhancing the exports of goods and services from SSI sector has to be based technology upgradation, value addition techniques, credit support and export marketing zones.