Cii Calls For Lower Costs In Ssi Sector
To make the small-scale industry competitive in the World Trade Organisation regime and to achieve a higher growth rate, there is an urgent need to reduce the cost of capital, remove procedural bottlenecks, and increase research and development support, according to a Confederation of Indian Industry (CII) study to analyse the impact of the removal of quantitative restrictions on the small-scale sector.
For technology upgradation, more exposure to international markets through industrial interaction was also required, the study said.
The survey, covering sectors such as pharmaceuticals and chemicals, clocks and watches, garments and machine tools among others, has revealed that the small-scale industry is gaining awareness about the benefits of WTO, as well as the limitations they faced in the closed economy.
In fact, a number of companies in the small-scale sector are striving hard to achieve the International Standards Organisation/Bureau of Indian Standards certifications.
They are also tightening their belts against cheap imports from China, thereby reducing their cost of production.
However, the overall observation of the survey was that the government needed to create a hassle-free environment for small industry entrepreneurs, enabling them to concentrate on improving their quality of products and reducing costs to meet the challenges of globalisation.
According to the findings of the survey, the machine tools and instrumentation sector had organised and formed clusters at the regional level, thereby enjoying the advantage of economies of scale by bulk imports.
On the other hand, organisations like Mother Diary and Amul, sourcing their material from a number of cooperative societies and dominated by small entrepreneurs, had started marketing their products aggressively and had increased their sales, thereby increasing the profits of small suppliers throughout the country.
According to the survey, the toy industry has been improving on quality, and regularly updating the technology to compete with Chinese imports.