In Gujarat, 9% SMEs shut down operations: State govt official

According to Assocham, there are close to 300,000 registered SMEs in Gujarat

A day after Gujarat government tried to rebut Aam Aadmi Party (AAP) convener Arvind Kejriwal’s claims on closure of Small and Medium Enterprises (SMEs) in the state, a senior state government official on Thursday said that at least nine per cent of SMEs, registered before 2010, have closed down operations.

There are close to 300,000 registered SMEs in Gujarat, according to the Associated Chambers of Commerce and Industry (Assocham). However, close to 95 per cent of SMEs are unregistered.

“At least nine per cent of SMEs have closed down their operations in Gujarat. This is according to a survey conducted by the Central government for the period between 2007 and 2012,” said D J Pandian, additional chief secretary, Industries and Mines department, government of Gujarat. He was speaking to mediapersons on the sidelines of a seminar “Funding SME’s Unlocking the Growth Potential” organised by Assocham here.

He, though, specified “I don’t know the exact number of SMEs that have shut down their operations.”

Across the country, 22 per cent of SMEs have closed down operations, he said citing the survey. While Gujarat, Pandian said, has witnessed improvement from the previous survey conducted between 2002 and 2007, during which 12 per cent of SMEs had shut down operations in the state.

The state, he said, wants to bring down the percentage of closed SMEs to 5 per cent by the next survey.

On Tuesday, Arvind Kejriwal, while announcing his candidature from Varanasi constituency in Uttar Pradesh had claimed that over 60,000 SME units have closed down in Gujarat. Rebutting his claims, the Narendra Modi government in Gujarat had issued a statement saying that it was a blatant lie. State government in a statement had claimed that out of the 0.51 million SME units registered in Gujarat 95 per cent were operational.

Pandian cited limited finance, inefficient marketing techniques, lack of quality upgradation in products and services, labour shortage, among others, as the reasons for the closure of SMEs in Gujarat. He emphasised on the need for dialogue between industry associations, SMEs and governments to improve their quality.

“They need to improve their quality of products and services. Government needs to step in, initiate dialogue between industry associations and SMEs to improve their quality,” he said.

Pandian informed said that seven task forces have been appointed in various sectors to increase the competitiveness of SMEs. These task forces, he said, would come out with recommendations and suggestions after the Lok Sabha elections.

He further said that the state plans to bring out a new industrial policy after the general elections.