More can be done to encourage SMEs: Anshuman Magazine

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Saurabh Gupta | 13 Jul, 2009
More can be done to encourage SMEs by cluster development and by enhancing participation of SMEs in infrastructure development, CEO of Richard Ellis Property Consultants, Chairman & MD of CB Richard Ellis South Asia Pvt. Ltd., Anshuman Magazine told SMEs Times in an exclusive interview.

Excerpts of the interview...

Indian Small and Medium Enterprises (SMEs) contribute significantly towards the economic growth of the nation. What according to you the government should do for the welfare of SMEs?
Anshuman Magazine: The government too are encouraging SMEs because they do recognize the importance of SMEs and so there are lots of policies, which encourage SMEs. Lots of sectors are protected from the past till now. However obviously more can be done to encourage them. First thing is clusterization of unorganized sector, like if we see the auto industry, there is a big contribution of SME sector but it is not very organized. Second, the government needs to encourage participation of small industries in reality sector by investing more in infrastructure and reality sector.

Due to global economic slowdown, how do you see the prospects of growth for the reality sector in India?
Anshuman Magazine: None of the nations are left untouched by the impact of global slowdown and so is the Indian economy. But the best thing is that in India the investments are still on and the most important is that the domestic demand is still there. So we haven't seen that much impact of slowdown as the Western countries had seen. Although there were job losses across the industry, due to not only investments by the government but also by the private sector the conditions are under control. And from the infrastructure point of view, I think there are tremendous prospects for real estate sector to grow. And as the government is planning to invest more in infrastructure so I think there are huge opportunities for reality sector in this area.

What do you think the government is required to do in this direction?
Anshuman Magazine: To make India a developed country our government needs to invest in infrastructure, which the government is doing. What is the difference between the developed and the developing nation is infrastructure and human resource. We have a good talented work force and in order to utilize the work force, we just required the investments in infrastructure. And from the infrastructure point we need a huge man power. As the prime minister has already announced to invest $ 500 billion in retail sector so I think there are huge opportunities in real sector in India. And so opportunity to invest in infrastructure will also increase significantly.

In your opinion, how much the government needs to invest in infrastructure?
Anshuman Magazine: Frankly, a large portion should be allocated for infrastructure development but then there is factor of social infrastructure, which is again very important. I think a large part of budget should be allocated for infrastructure and that's what our finance minster did in the Union Budget 2009. Along with the announcements of projects and the allocation of funds, the implementations of projects is also very important. And because of delay in implementation, hundreds of projects get delayed and what ever capital we have, we are waisting due to delay in project. Second thing is lack of funding, lots of projects are facing the problem of non-availability funds. So the governments (central and state) are required to look in this direction.

How do you see Foreign Direct Investments (FDI) in retail?
Anshuman Magazine: FDI in retails must be allowed. The size of Indian retail trade is of around $180 billion, which is almost 10 percent of GDP, employing more then 21 million persons. And to attract foreign investors the policies should be more transparent and smooth. And there should be some kind of assurance guaranty of favorable conditions to enhance foreign investments. As any body putting money in any investment, we need to understand that he is expecting return out of that. So we have to assure them may be in the longer term of better returns.

To remain competitive in the global economy, what will you suggest SMEs to do?
Anshuman Magazine: Survival is the biggest challenge during the economic slowdown and so SMEs too are fighting for their survival of business. I think there are always both advantages and disadvantages of recession. And SMEs are required to take this phase of slowdown as an advantage for their business growth. To remain competitive SMEs are required to remain calm and steady. Produce as per the demand and don't compromise with the quality. Take this time to check your in and out supply chain. Sharp monitoring of supply chain also improves business qualities.