President's Message
Performance & Credit Rating Scheme needs a relook
"Benefits of credit rating schemes have not accrued to MSMEs so far because the ratings given by the agencies are much inferior to those given by their own lender banks, causing avoidable problems for the MSMEs….As such the amount (budget allocation for the scheme) should be kept in abeyance until a way out is found or utilized under more useful heads of expenditure."
- Mr V.K. Agarwal
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Biz outlook for this quarter positive: FISME survey
In response to our survey on business outlook for the current quarter (April to June, 2012), 57% of responding SMEs have indicated a positive outlook while the rest indicated a negative outlook. None of the respondents indicated an unchanged outlook.
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Dear Readers,
The government has at long last notified the much awaited public procurement policy for Micro, Small and Medium Enterprises – a step that FISME has been demanding for several years now. The move should go a long way in helping Indian MSMEs to survive and grow provided it is implemented as intended. For this reason, the MSME sector needs to remain vigilant and make sure that various central government undertakings and departments are actually following the directive in letter and spirit. This issue also highlights product areas that have great trade and investment potential within BRICS countries. Read Absar Alam’s article to find out what these products/product groups are. But before you plunge into all that reading revelry, just a gentle reminder: this newsletter is now reaching more than 1.5 lakh MSMEs. Advertise at almost no cost and reap the benefits!
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After inauguration of FISME's first two Intellectual Property Facilitation Centres (IPFC) in Bangalore and Hyderabad, the third IPFC located in New Delhi will be inaugurated on World IP Day, April 26, 2012.
Know more about Cloud Computing. Participate in FISME's SME Connect workshops being organised across the country in partnership with global software majorMicrosoft Inc. After the first workshop in Gurgaon the second one will now be held in Hyderabad on April 27, 2012. Book your seat now to interact with senior executives having in-depth knowledge of Cloud Computing for two hours (1800-2000 hrs) followed by dinner.
Contact:
Mukesh Kalra
+91–11–26187948, 46023157
mukesh.kalra@fisme.org.in
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Policy Polemics
Public procurement policy: Lessons from UK
The recently notified public procurement policy for SMEs has been long awaited. Here is an article from The Guardian, London on the public procurement policy in the UK. The article is significant as it raises issues that may be relevant in the Indian context.
Finance Fundamentals
Insurance Claims – A Clean-up needed
I have discovered a pitfall of being in insurance. Whenever I am at a get-together, people group around me to recount the different ways in which they have been cheated. This is disconcerting. While I can and do give a spirited defense in many cases, I am often at a loss of words on the issue of claims denied unfairly and claimants treated shabbily.
Move under way for inventory bandwidth on SME exchange
 The SME exchange of the Bombay Stock Exchange is actively working on evolving an “inventory bandwidth” model that will enable migration of market makers from unlimited liability model to one with a ceiling for maximum and ground for minimum floating stock.
HR Heuristics
The art of networking and selling
 " Many businessmen do good quality work but are hesitant or squeamish about selling their goods or services. I have met several who say ‘I’m not good at it’ or ‘its demeaning to make business calls’. But the truth is that selling like any other work requires planning, persuading and perseverance. "
Manufacturing Metrics
Should every business have a board of directors?
Some small business owners assume company boards are for big business, but every organisation should consider the merits of having a board, argues Richard Westlake. A board of external directors can provide valuable support for any business with a broad range of stakeholders, significant bank debt or other financiers, or a growing number of employees who depend on its continuing success, he says.
Technology Tracker
SMEs taking to more ICT solutions
 In the next 12 months, we expect operators to drive more mobile ICT solutions to small and medium enterprises (SMEs). Large enterprises have relied on mobility solutions that integrate with their IT and application environments for several years. Now operators and vendors are re-designing those solutions for SMEs.
Trade Trends
Big scope for SMEs to boost intra-BRICS trade
The declaration made at the recent BRICS (acronym for Brazil, Russia, India, China and South Africa) summit in New Delhi defined the common position of the group over a range of issues. The countries in the group agreed to continue the process of sustainable development in their respective regions and Small and Medium Scale Enterprises (SMSE) have an important role to play in this, says Absar Alam.
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Directory of Testing Laboratories in India
Buy our one-of-a-kind guide to all industrial testing laboratories in India. Find the one most convenient for getting your products tested and certified. An invaluable compendium for all industrial units and exporters.
PP: 894, Hard Cover.
Price: Rs 900.
50% discount for members.
Handbook for Managing Export Payment Risks
If you are an exporter you simply cannot do without this unique publication which tells you how to manage payment and other risks arising from exports.
PP: 78.
Price: Rs 300.
50% discount for members.
Free Publications
Fertilizer quality control in India: Need for change
This monograph argues for a systemic change in fertiliser quality control. Essential reading for those in policy-making positions.
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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:
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Govt notifies public procurement policy for MSMEs
 After prolonged deliberations, the Central Government has finally notified the “Public Procurement Policy for Micro and Small Enterprises (MSMEs)” through an Order dated March 23, 2012 (under Section 11 of the MSMED Act, 2006). The Policy comes into force with effect from April 1, 2012.
The Policy was approved by the Cabinet on November 1, 2011 and since then the MSME sector has been waiting for the relevant necessary Order to be notified. The Policy makes it mandatory for all central government departments and PSUs to achieve an annual target of sourcing at least 20% by value of their total annual procurement of goods and services from MSMEs within three years. One fifth of this target is to be procured from enterprises owned by SC/ST. The respective buying agencies will also have to report the actual procurement in their annual reports. The Order also notifies a special dispensation to MSMEs having a tendered price in the band of L1+15%. A portion up to 20% of the tendered value could be given to the MSME at L1 price provided the L1 happens to be a non-MSME.
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Karnataka partners FISME to promote GIM 2012
 FISME has signed a Memorandum of Understanding (MoU) with the Karnataka government as a partner organisation for promoting the Global Investors Meet 2012 to be held on June 7-8, 2012 at the Bangalore International Exhibition Centre on the outskirts of Bangalore. According to the MoU, FISME will also be allotted a separate pavillion at the exhibition. The development came about thanks to the efforts of FISME’s immediate past President Shri Mohan Suresh. In the second edition of the GIM, the state government plans to give greater priority to micro, small and medium enterprises (MSME), Karnataka Chief Minister D.V.Sadananda Gowda announced in Bangalore on Thursday.
FISME members interact with Chinese trade delegation
 FISME members got an opportunity to interact with members of a Chinese business delegation in New Delhi on April 13, 2012. The Chinese delegation comprised as many as 20 large, small and medium scale companies from the agriculturally-rich Sichuan province of western China. The delegation’s visit was organised by the India China Economic and Cultural Council (ICEC) and the China Council for Promotion of International Trade (CCPIT). FISME was a partner organisation at the event held at the India International Centre.
FISME completes nation-wide Quality Awareness campaign
 Over the last three months – January to March – FISME as the MSME outreach vehicle of choice of the Ministry of Micro, Small and Medium Enterprises, organised as many as 20 events across the country (see map) to make Micro, Small and Medium Enterprises aware of Quality Management Standards (QMS) and Quality Technology Tools (QTT) in fulfilment of the Quality Awareness component of the National Manufacturing Competitiveness Programme (NMCP) of the Ministry.
FISME submits views on Credit Rating Scheme to House Panel
 FISME, the voice of Indian Micro, Small and Medium Enterprises (MSMEs) with a network of 730 MSME associations, was given an opportunity on April 3, 2012 to present the views of its constituents on the Demand for Grants (2012-13) for the Ministry of MSME before the Parliamentary Standing Committee on the subject. While submitting written submissions, the FISME delegation led by President Mr V.K. Agarwal highlighted two major issues before the Standing Committee: (a) need for mechanism to ensure implementation of public procurement policy, and (b) need for a new approach on government spending on MSME schemes.
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Do you think the interest rate cut announced by the RBI on April 17, 2012 will boost the economic growth rate this fiscal?
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Macro Metre
IIP growth falls to 4.1% in February, dashes recovery hopes
India's industrial production rose less than expected in February while January numbers were revised sharply downwards indicating the $1.6-trillion economy was struggling to gain momentum but raising the probability that the Reserve Bank of India would cut policy rates next week for the first time in three years.
India's exports cross $300 billion, but trade deficit balloons
 Braving slowdown in the US and Europe, India's exports crossed USD 300 billion in 2011-12, but rising import bill pushed by high crude oil prices and the country's obsession with bullion sent the trade deficit soaring to USD 185 billion.
Bankers to ease credit flow to SMEs
 Leading bankers recently hoped the Reserve Bank of India (RBI) will lower interest rates in its forthcoming monetary policy review to help ease credit flow to micro, small and medium enterprises (MSMEs) as high cost of funds in the past two years has dented their competitiveness. High inflation and tapering of demand in interest-sensitive sectors amid gloomy global macro-economic conditions are not conducive for raising low-cost funds, said M. Narendra, chairman and managing director of Indian Overseas Bank while addressing a workshop organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). E-commerce portal for MSMEs from April 30
A new international e-commerce portal that offers a wide range of products from garments to industrial products manufactured by the micro, small and medium enterprises (MSMEs) sector in India is in the offing. Unlike other e-commerce sites, this portal, designed and created by the National Small Industries Corporation (NSIC), will cater exclusively to the needs and demands of the MSMEs. Set up rehabilitation fund for sick MSMEs: RBI to govt
 In the wake of rising number of sick micro, small and medium enterprises (MSMEs), the Reserve Bank India (RBI) has suggested the government for setting up a rehabilitation fund for reviving of such units, reports media. "...Rehabilitation of sick MSMEs could not be taken up due to non-availability of promoters' contribution in a large number of cases, RBI has recommended to the government to set up a 'rehabilitation fund' for sick MSMEs," RBI Deputy Governor K C Chakrabarty said at a conclave in Mumbai recently. UP's MSMEs table roadmap for sectoral development
 The micro, small and medium enterprises (MSMEs) of Uttar Pradesh tabled a roadmap for the overall development of the sector. In consolidated terms, the state has more than 3.1 million MSMEs, including 7, 60,000 and 2.34 million units in the manufacturing and services sector. The sector accounts for the employment of over 5 million people of the stateand accounts for nearly 12 per cent of the Indian MSME base. It accounts for eight per cent of the state gross domestic product (SGDP) of about Rs 6, 00,000 crore (current prices).
50 innovation clusters to help MSMEs: Sam Pitroda
The National Innovation Council (NInC) aims to have around 50 innovation clusters covering the entire country by the end of 2012 to help out the Micro, Small and Medium Enterprises (MSMEs), Chairman Sam Pitroda said recently. "We plan to finish pilot, learn from it and then take this project to 50 clusters. I would like to see 40-50 clusters doing such innovations by the end of 2012. Ideally, would want 150 clusters in India to have innovation centre by the end of next year," Pitroda said, giving an update on the Innovation Cluster initiative launched in November 2011.
MSME schemes promoting women entrepreneurship in NE
 The Ministry of Micro, Small and Medium Enterprises (MSMEs) recently said that special schemes launched by the ministry to promote women entrepreneurship in the North-Eastern Region have resulted in more employment generation for women in the region. The ministry promotes schemes and programmes that have special dispensation for women entrepreneurs in the North-Eastern Region leading to more employment generation for women of this region, an official statement said.
Agri-industrial fair: Networking for farmers, entrepreneurs
 An agricultural and industrial exhibition was held to provide farmers and entrepreneurs an opportunity to network in Haripur campus of Hazara University recently. Farmers from across Hazara, women artisans and financial institutions displayed their products at the exhibition which was organised by the State Bank and Small and Medium Enterprises (SME). There was an extraordinary rush of visitors around women artisans exhibiting embroidered items, toys, floral pots and other handicrafts.
Karnataka identifies four coir clusters for regeneration
 The Coir Board plans to launch a slew of new products as well as initiatives to grow its domestic sales. “The Coir Board is planning to launch low-cost products, popularise coir-based products in north and north eastern states and incentivise entrepreneurs to take up value-added products,” said the Coir Board Chairman, Prof G. Balachandran. The board expects these initiatives will boost sales from domestic business over 65 per cent to Rs 2,000 crore for the current fiscal.
Handicraft exports up by 17.56 pc in FY 2011-12
 India’s handicraft exports have increased by 17.56 percent to USD 2.7 billion in financial year 2011-12 over the similar period in 2010-11, informed the nodal body of handicraft exports today. "According to the provisional data available the handicrafts have shown an increase of USD 404.14 million, from USD 2301.52 million to USD 2705.66 million, an increase of 17.56 percent in dollar terms,” Executive Director of the Export Promotion Council for Handicrafts (EPCH), Rakesh Kumar told SME Times on the sidelines of a press conference in New Delhi.
Credit growth to Gujarat small units shrinks
Credit growth for micro, small and medium enterprises (MSME) in Gujarat has reported a decline during the December quarter of 2011-12, compared to the September quarter, a report from the State Level Bankers’ Committee (SLBC)-Gujarat has noted. Industry insiders said the reason was reduced lending by banks in the wake of slow manufacturing activity and high interest rates.
Tamil Nadu govt to hand-hold small entrepreneurs
In a move to boost the micro, small and medium enterprise (MSME) sector in Tamil Nadu, the state’s government has come forward to address three major constraints – finance, infrastructure and marketing – of entrepreneurs. Besides, the state government has also said it would hand-hold entrepreneurs while they start their businesses and play the role of a facilitator in finding customers for them. The state government also announced an allocation of Rs 150 crore for the MSME sector in its Budget for 2012-13.
Banks see investment opportunities in Ghaziabad, Meerut
 Ghaziabad and Meerut may become big-ticket investment opportunities for many public and private sector banks just because of the sheer number of industries based here. More than 30,000 small-scale industries (SSIs) are operating in the two districts of the state. Going by what the banks have to so say, the signs look only promising.
RS 50 crore garment factory to be set up in Sullia
Individuals who are interested to become entrepreneurs should be encouraged, opined Karnataka State Small Scale Industries Development Corporation Limited (KSSSIDC) Managing Director Dr D S Vishwanath. He was addressing the entrepreneurs in an interactive meeting organised by Kanara Chamber of Commerce and Industry (KCCI) in Mangalore. “Global investor’s meets are focusing exclusively on investors. The government acts as a facilitator in these meets and helps in creating conducive atmosphere for the setting up of the industries,” he said.
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Focus on Thailand
Heed the call of the SMEs
 Thailand has imposed a new 300-baht minimum wage in seven pilot provinces, including Bangkok, since April 1 despite widespread protests by many business operators.Operators of so-called SMEs (small and medium-sized enterprises) have expressed concerns that the substantial wage rise may put them out of business or force them to make staff redundant. It is too early for governmental agencies to tell what kind of impact the wage hike is having on business operators, as well as the extent of compliance with the wage rise by the business sector. But instead of just waiting for the information to arrive, authorities should look into concerns raised by the business operators and explore ways to help them cushion the impact.
Focus on Nigeria
Govt, banks mull new funding mechanism for SMEs
 IF the latest pronouncement from the Federal Government on the issue is anything to go by, then small and medium enterprises (SMEs) in the country would soon receive a much-needed lifeline in the form of easy credit facilities from banks. Minister of Trade and Investment, Olusegun Aganga, gave that much assurance yesterday in Abuja at a meeting with the desk managers in charge of SMEs in banks.
Focus on UAE
Al-Futtaim Motors shares industry insights at SME Connects
 Al-Futtaim Motors, exclusive distributors of Toyota in the UAE, announces the sponsorship of the third SME Connects, a general meet for more than 3,000 small companies operating in the UAE and shares important SME related insights with the industry leaders. Organized by Entourage Marketing and Event, SME Connects takes place at the XVA gallery in DIFC. Its main area of interest is providing a focused networking platform for SME owners and companies offering support services to the industry, and those looking to set up small start-up companies in the country.
Focus on US
US SMEs' confidence drops in March
 US small business confidence in March fell slightly after rising for six straight months, a leading industry association said recently. The National Federation of Independent Business (NFIB) said its Small-Business Optimism Index decreased to 92.5 in March from a one-year high of 94.3 in February. Most notably, nine of 10 index components dropped last month.
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Participate in the Caribbean Investment Forum
Participate in the Caribbean Investment Forum, May 14-15, 2012
Business Opportunities from Turkey
Business Opportunities from Turkey March 2012
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1 new member joins FISME
During the period April 1 to April 15, 2012 a total of 1 new MSME became member of FISME.
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