Incentives will help boost SMEs’ productivity: FICCI

The country’s small and medium enterprises hit by the tight availability of finance and high interest must be offered productivity led incentives to boost their business, said the Federation of Indian Chambers of Commerce and Industry. The chamber suggested that incentives must be given to SMEs considering that their interest cost had risen to 5.5 per cent from 3.5 per cent of their cost of operations during the last one year. This is higher than the interest cost of large companies, which rose to 2.5 per cent from 1.5 per cent in the same period. According to Ficci’s business confidence survey based on responses to 348 companies, 82 per cent of the participants favoured the need to protect the small and medium enterprises. While 97 per cent of the participants agreed that it is the SME segment that was facing the pressure mostly on account of the hardening interest rate, 48 per cent of the companies reported reconsidering or postponing some of their project investments.Mentoring programme In a related move, Confederation of Indian Industries launched a mentoring programme in the last week of September for SMEs, in collaboration with Japan International Cooperation Agency, Indian Institute of Technology (Kanpur and Madras) as well the Indian Institute of Management (Calcutta). The programme would aim to transform three-four companies such as Pune-based KK Nag, and Nashik-based Sipra Engineering and Rishabh Electricals with a turnover of Rs 40-50 crore into world class companies over the next three-four years. CII is seeking to make these companies a model for others in the segment to follow, through a series of initiatives. – www.thehindubusinessline.com