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The FISME Factor


President's Message
" The latest Moody’s Analytics report reiterated what FISME has been saying for months: ‘slower economic growth and rising interest rates have made it tougher for borrowers to repay debt’. India’s non-performing loan ratio increased from 2.3 % (2011) to 4 % (2013) largely because of Banks’ over exposure to infrastructure projects. While corporate debt restructuring is in full swing, Banks care a damn about restructuring of smaller loans. Unfortunately the legal option of exit or closure is also not available for SMEs in India. The longer the situation remains unattended, the more tragic will be the consequences. The new government has its task cut out. "
Dr. D. Gandhikumar, President, FISME
Vol IV, Issue 56: April 15, 2014
Dr. D Gandhikumar re-elected as FISME President
Hind Unilver-FISME kick-start joint awareness campaign on Competition Laws from Gurgaon
Business Banter: Lessons from Entrepreneurs
No Marketing? No Problem
Macro Metre
5 booster projects for the new government to kick-start the economy
Industrial production at nine month low; several sectors bleeding Knowledge and News Network (KNN)
Domestic Digest
Microsoft Ventures launches dedicated helpline for Indian Startups
MSME Ministry to organize Six-Sigma course for entrepreneurs Knowledge and News Network (KNN)
State Scan
Pharma SMEs from Gujarat see 20% growth in exports
Himachal implementing energy conservation programme Knowledge and News Network (KNN)
World Watch
Indian Ayurveda to go global, CCRA tie-up with Hungary University
Knowledge Store
Veeral Patel's journey from being a roadside eatery helper to building a Rs 4 crore
...And A Lot More


Dr. D Gandhikumar re-elected as FISME President

Dr. D Gandhikumar, has been re-elected as President of the Federation of Indian Micro and Small & Medium Enterprises (FISME) at a meeting of the Central Executive Committee here. Dr. D Gandhikumar, the promoter of the Coimbatore based Gandhikumar Foundry has been re-elected for another year at a time when the MSME sector is going through one of the most difficult periods with the manufacturing sector at a nine month low and several of the sectors reporting as much de-growth as over 40 per cent as per the official data for February.

Hind Unilver-FISME kick-start joint awareness campaign on Competition Laws from Gurgaon

With the view to empowering MSMEs to take advantage of the Competition Laws in India, FISME and Hindustan Unilever Limited have jointly initiated a nationwide campaign to create awareness about the rights and responsibilities of the small businesses under the Act. The first session on Competition Law and Compliance was held recently in Gurgaon where 47 participants from the MSME sector took part. The session covered the topics such as unfair trade practices, cartelization, monopolies etc.
Business Banter: Lessons from Entrepreneurs

No Marketing? No Problem

- Kelly Clay, Seattle-based freelance writer and content marketing strategist
Many startups – especially those in the mobile industry, developing apps – believe that in order to acquire users you must devote a significant chunk of time and money into user acquisition. How else are you going to rise the ranks of the app store without banner ads and leveraging social media channels to drive downloads and engage users, thereby eventually growing organically? WhatsApp demonstrated that you can actually acquire users – and keep them engaged – with a marketing budget of $0. By creating an app that simply solved a problem facing millions of users internationally, the founders were able to create traction organically. This traction – and market penetration – was not only a success for WhatsApp, but was appealing enough for another company to acquire them.

[4 Lessons Entrepreneurs Can Learn From WhatsApp's Acquisition]
Writing on the Wall

Double whammy

Last Friday, both the February numbers for the Index of Industrial Production (IIP) and the March numbers for merchandise trade were published. Both indicators surprised negatively, together dashing any hopes that the economy had at least established a firm bottom, even if recovery may still be elusive. Industrial production overall declined by 1.9 per cent from February 2013, a rather striking fall. Even this was the result of a spectacular performance by the electricity generation sector, which grew by over 11 per cent. In contrast, manufacturing declined by 3.7 per cent. Both the aggregate index and the manufacturing index have shown a decline for the April-February period, making it very likely that 2013-14 will finish that way.
[Adapted from The Business-Standard]

Media Monitor

Macro Metre

5 booster projects for the new government to kick-start the economy

Whatever be the political coalition that comes to power at the Centre after May 16, the new government will have five ongoing projects to kick-start a sluggish economy. These low-hanging fruits of labour of the two-term UPA government - the eastern and western Dedicated Freight Corridor (DFC) projects, the first phase of the Delhi-Mumbai Industrial Corridor (DMIC), Metro rail projects in nine cities, airport modernisation in six cities, including Chennai and Kolkata, and power projects that have signed fuel-supply agreements (FSAs) - are there for the new dispensation to pluck.

New government may have to take timely decision to allow onion imports to avoid crisis

Preparing a plan to avoid a repeat of the 2013 onion crisis is likely to be the first task for the next Government. Uncertainty about the quantity and quality of onion that will go into storage and fears of a below normal monsoon, as being hinted by forecast agencies, may lead to a crisis worse than the one seen in the previous year, when retail prices touched Rs.100 per kg. Government agencies and trade sources tracking the essential vegetable estimate the loss to the Rabi onion crop at about 10-15 % due to the hailstorm and unseasonal rainfall in key onion growing states of Maharashtra, Madhya Pradesh and Karnataka in February and March.

Government plans detailed FAQs on CSR issues

To help companies for their social welfare activities under the new legislation, the government plans to come out with various initiatives including a detailed set of 'Frequently Asked Questions' (FAQs) for the stakeholders. Certain class of companies are now required to shell out at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities. The Corporate Affairs Ministry plans to put out detailed FAQs and their answers on CSR activities to provide more clarity for companies and other stakeholders, according to an official.

Industrial production at nine month low; several sectors bleeding

Industrial production has touched a nine month low, showing an annualised drop of 1.9 per cent in February 2014 with several key items of interest to the MSME sector like apparels, PVC pipes and tubes, HR sheets cable, rubber insulated and telephone instruments reporting a massive decline in the month - as high as 49 per cent in some. In terms of industries, 13 of the 22 groups in the manufacturing sector have shown negative trend. The overall manufacturing index dropped by 3.7 per cent while the electricity sector provided some consolation, showing a positive trend of 11.5 per cent.

Domestic Digest

MSME Ministry launches virtual network to link clusters

The MSME Ministry today launched a virtual network wherein different clusters of micro, small and medium enterprises (MSMEs) can connect on a common platform and share information to help them expand their businesses. "This virtual network of clusters will provide a networking platform for all stakeholders to connect with micro, small and medium enterprises," MSME Secretary Madhav Lal said at the launch of the virtual cluster initiative here.

Microsoft Ventures launches dedicated helpline for Indian Startups

Microsoft is betting on the small and medium enterprises segment for the expansion and adoption of its cloud offering like Windows Azure, Office 365 and Dynamic CRM Online. "Microsoft Ventures supports startups at every stage of maturity by providing them with the tools, resources and expertise they need to succeed," said Joseph Landes, General Manager, Developer & Platform Evangelism, Microsoft India. "Our experience has shown that a major pain point for startups across the ecosystem in India, irrespective of their stage of maturity, is the lack of real-time support for various critical queries they face. JumpStart fills a major gap and ensures that startups get professional advice that enables them to make smart business decisions," said Landes.

MSME Ministry to organize Six-Sigma course for entrepreneurs

The technology development centre (TDC) of the Ministry of Micro Small and Medium Enterprises (MSME) is going to organise a four day certificate course on six sigma black belt programme for small entrepreneurs at the fee of Rs 40,000. TDC, Agra also known as process and product development centre, presents an eight day programme on six sigma, black belt certification in April and May in the national capital, said a notification today. The centre provides training and consultancy services for the development of MSMEs. It provides a comprehensive range of services to the sector in India in terms of technical assistance, information, provision for common facilities etc.

Exports fall in March, drop for second month running

Merchandise exports fell in March, for the second month in a row reflecting the constraints of slowing manufacturing sector with a significant presence of the MSME sector. In March exports contracted by 3.15 per cent to USD 29.57 billion and imports fell by 2.11 per cent to USD 40 billion as compared to the same period last year. Trade deficit during the month was at USD 10.5 billion as against USD 10.4 billion in March 2013. However, the total exports grew by 3.98 per cent to USD 312.35 billion for the financial year 2013-14 while imports fell by 8.11 per cent during the period.

KVIC gets Rs 930 cr, creates 13% more jobs in 2013-14

Estimated employment opportunities created by the Khadi and Village Industries Commission (KVIC) - predominantly in the micro, small and medium enterprise (MSME) sector - in rural and urban areas of the country increased by 13 per cent in 2013-14 (as of January 2014), to 140.29 lakh. To boost the sector further the government has released Rs 929.88 crore for it in 2013-14. According to official data, estimated employment generated (cumulative) in 2013-14 (up to January 31, 2014) by Khadi was 10.89 lakh, while employment generated by village industries was 129.40 lakh, as compared to 10.71 lakh and 114.05 lakh by the two respectively in 2012-13.
State Scan


Pharma SMEs from Gujarat see 20% growth in exports

While big pharma companies are facing hurdles on the export growth front thanks to the issues with the US drug regulator, in contrast, small and medium enterprises (SME) have seen a good growth in formulations exports this fiscal. Pharma SMEs in the state of Gujarat, which is considered a pharmaceutical manufacturing hub and houses over 200 WHO-GMP certified manufacturing facilities, have clocked a 15-20 per cent growth in exports to semi-regulated markets this year.

Himachal Pradesh    

Himachal implementing energy conservation programme

The Himachal Pradesh government proposes to implement a programme on conservation of energy by installing different hi-tech equipment. The Directorate of Energy (DOE) in the state will soon install equipment such as power parameter measuring instruments, flu gas analyser, power manger, RH meter and temperature measuring instrument to improve energy efficiency. Towards this, DOE is inviting bids from energy auditors and energy audit firm agencies for the proposed project.


RIICO exempted from service tax; SMEs may benefit

Rajasthan State Industrial Development and Investment Corporation Limited (RIICO) has been exempted from service tax as per the new notification of the central government, consequent upon which the money paid to it on account of conversion of land, transfer and maintenance of land, etc will not be subject to service tax. The development has an implication for the industrial units located in the estates developed by RIICO. “In view of this and the opinions received from tax consultants, the management of the corporation has decided to stop recovering and depositing service tax on all heads pertaining to infrastructure activities (as covered under functions entrusted to municipality) excepting ‘rent’ and ‘testing charges’ henceforth,” it said.


Tehri to become international tourist destination

As part its ongoing efforts to strengthen the tourism sector, the Uttarakhand government has proposed to promote and establish a world class theme based tourism facility in the Tehri lake area. The Uttarakhand government has taken various initiatives to promote tourism sector as one of the major contributors to the economy of the state. Tehri is one of the most attractive tourist destinations in the state. It has many options for tourism and has a lot of religious places that have potential to be developed.
World Watch


Indian Ayurveda to go global, CCRA tie-up with Hungary University

The Central Council for Research in Ayurvedic Sciences (CCRAS) has joined hands with the University of Debrecen, Hungary to setup a Chair in Ayurveda on full time fixed term contract basis for a period of two years. CCRAS is an autonomous body under the Department of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) under Union Ministry of Health & Family Welfare. Giving opportunities to the Indian students, the centre has invited applications for the Ayurveda Chair on full time fixed term contract basis in the University of Debrecen, Hungary for a period of two years, subject to satisfactory performance and review after one year.


Spain’s the largest exporter of LNG, but doesn’t produce a drop of it

Spain overtook Norway last month to become the region's biggest exporter of liquefied natural gas. The southern European nation has never produced any of the fuel. The twist is a consequence of the crisis that left more than a quarter of Spain's workers unemployed as the economy weakened for nine straight quarters. Utilities that contracted to buy LNG before the slump are now contending with a sixth consecutive year of diminishing domestic demand, spurring them to re-export cargoes.


India should take a leaf out of Singapore's water harvesting to solve its crisis

Water is increasingly becoming a scarce resource. The strains are being felt within and between nations. India has its own share of water conflicts between its federal units and with its neighbours. This apart, climate change has begun to cast its shadow on events. Apart from traditional agricultural uses, urban and industrial demands on water are assuming critical proportions. With the shrinking availability of fresh water sources, supply-side solutions have run their course.

United Kingdom    

UK-India to develop sustainable supply networks

Leading firms have now recognised that the industrial sustainability of their product supply chains, from the availability of source materials to the consumption habits of end-users, is going to influence strategic considerations on the future design of products, manufacturing processes and location of international manufacturing operations. This was stated by Head of University of Cambridge’s Institute for Manufacturing (IfM) Jagjit Singh Srai, during the launch of a programme aimed at developing sustainable global supply networks here on April-9. The workshop brought together a joint research team from University of Cambridge’s Institute for Manufacturing (IfM), Indian Institute of Technology Ropar and Indian Institute of Management, Lucknow.
Upcoming Events

Session on the Competition Law and Compliance – focussed on MSME

Date: April 18, 2014
Venue: Bangalore

FISME Trade Delegation To Taiwan

Date: 06th May 2014 to 11th May 2014
See Details
Other Events

Die & Mould India International Exhibition

Date: Date: 17th April – 20th April 2014
Venue: Bombay Exhibition Centre, Goregaon, Maharashtra
See Details

International Industrial Expo-New Delhi

Date: 19th April – 21st April 2014
Venue: NSIC Exhibition Complex, New Delhi
See Details

Pharma Pro & Pack Expo

Date: 24th April – 26th April 2014
Venue: Bombay Convention & Exhibition Centre, Mumbai
See Details


Date: 24th April – 26th April 2014
Venue: Expo Centre, Noida
See Details

Glassx Today

Date: 25th April – 27th April 2014
Venue: Chennai Trade Centre, Chennai
See Details
Your Views

Election manifestos are more like the Elephants’ Teeth

According to the FISME Factor, 94 per cent of the Micro, Small and Medium Enterprises (MSMEs), think that election manifestos are valuable, ornamental but with little cutting edge just like elephants’ teeth.
Knowledge Store

HR Heuristics

Set them free

# The concept of freedom is perhaps something not many workers would see as belonging to the company world. Work hours have to be respected, targets have to be reached and management decisions accepted. However, since the early Nineties a new wave of managers has embraced the ideology of freeing up firms. What this means in practice is that these CEOs seek to follow an almost revolutionary management path. Their doctrine is to reduce dramatically the levels of control within their organisations, thus liberating personnel from the shackles of tight management control. This freedom will allow workers to innovate, making them feel better about their role and also their employer. Performance should improve and all involved should feel the benefits.

Finance Fundamentals

Companies Act: Roaring time for small investors

Can a corporate fraud, such as the one unearthed at Satyam Computer Services, have a positive outcome for investors? The answer is yes. The scam’s magnitude and the delay in detecting it had the regulators sit up and take notice. The new Companies Act 2013, which has taken effect from April 1, has plugged many of the loopholes that made the Satyam scam possible and has done quite a bit to empower small investors. Take, for instance, the inability of Satyam shareholders to file class-action law suits.

Marketing Mantras

Getting down to the Brass Tacks of clothing

What do you do if you do not like the fit or the fabric of the clothes you are wearing? Most people would find a store that delivers what they want, but Anaka Narayanan from Chennai started her own label so she could make garments on her own terms. Getting down to brass tacks – or getting down to the fundamentals of a business – is what defines Anaka’s Chennai-based label Brass Tacks. This is Anaka’s seventh year but the primary principles remain the same: fit and fabric.

Policy Polemic

Smaller pharma contract producers face closure

Even as the pharmaceutical industry is growing steadily, attracting more foreign players into the market, small enterprises that have been depending on contract manufacture for larger players are facing the threat of closure, says a federation of small-scale pharma industry associations in the country. On the one hand, the pharma market, currently worth around Rs 75,000 crore and growing towards Rs 100,000 crore, is opening up a large market for companies; on the other, the number of small units has come down drastically, as large companies have expanded their manufacturing capacity, affecting the contract work done by smaller firms, says T S Jaishankar, chairman, Confederation of Indian Pharmaceutical Industry (CIPI).

SME Special

Grabbing eyeballs no kids' stuff

After a master's in business administration from Harvard Business School, Rahul Anand began working with diapers.com in the US. Subsequently, the company was bought by Amazon. Realising many of his friends always sought to buy baby brands from the West, as this was a better and cheaper option, Anand decided to set up an online shopping company that would get international brands for babies and new mothers into India, at competitive pricing. Lisa Kennedy, Anand's colleague at diapers.com and another Harvard Business School alumnus, joined him.

Success Story

Veeral Patel's journey from being a roadside eatery helper to building a Rs 4 crore sweet shop chain

No matter how many rags-to-riches stories you come across, the grit and enterprise of the people concerned always serve to inspire. Veeral Patel is one such entrepreneur, who started as a helper at a roadside eatery and has moved up to own a sweet shop chain worth Rs 4 crore. "My father was a poor farmer from KutchBSE 4.96 %, but worked very hard to fund my studies till class X. After that, he was unable to pay my fees. The year was 1982 and I was 16. So, I decided to go to Mumbai and look for a job," says Patel.


The Central Statistical Office (CSO) released the Provisional indices for the month of March 2014 and also final indices for February 2014.

Quotable Quotes

" You can’t figure out everything beforehand by reading about it. Just do it and make your own mistakes. Get back up, dust yourself off, and do better next time. "
- Fred Perrotta - Cofounder at Tortuga Backpacks
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Free Publications

Identification & Valuation of IPRs in MSMEs  

Identification & Valuation of IPRs in MSMEs
Identification & Valuation of IPRs in MSMEs - Selected Research Papers.
Country Chronicles
FISME regularly receives monthly reports on the economies of various countries from their missions in India. These reports provide information on key economic parameters, trade related information and all news relevant for importers and exporters. In this edition you can take a look at reports on:
Starting a New Venture
Coming August, K J Somaiya Institute of Management Studies and Research located in Vidyavihar, Mumbai is launching a certificate programme on Creating New Ventures.
Reader Reactions

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New Members

5 New Member Joins FISME

During the period from 01st April 2014 to 15th April 2014 a total of 5 new MSME became member of FISME.


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