'Realisation of SME potential a must for growth'

Q& A: Philippe R Scholtes

The United Nations Industrial Development Organisation (UNIDO) has been actively involved in developing small and medium enterprises in India. The agency plans to support selected clusters under the Industrial Infrastructure Upgradation Scheme (IIUS) in collaboration with the Department of Industrial Policy & Promotion(DIPP). Meghalee Das talks to Philippe R Scholtes, UNIDO representative and head of South Asia region, to know more:

What are UNIDO’s objectives for SMEs?

Globally, UNIDO has three priorities — poverty alleviation through productive activities, trade capacity building by offering advice and expertise, and promoting improved industrial energy efficiency for fighting climate change. Creating sustainable job opportunities being one of our major goals, UNIDO’s focus has been to assist and develop SME clusters.

 

How important is SME development for India?

For the economic growth of any developing country, it is important to tap the full potential of SMEs. Instead of having a number of unorganised industries, it will be more productive if they are integrated and at the same time are able to maintain their identity. Assistance on how to produce competitive exportable products — a key to their successful participation in international trade — must also be provided.

What are the challenges UNIDO faces in assisting SMEs in India?

The biggest problem is how to reach out to all the different clusters due to the large size of the country. Some of them don’t have easy access to credit and technical expertise and their products don’t comply with international quality standards.

How do you plan to address these problems?

UNIDO can intervene in a direct or an indirect manner, where some one at the local level can interact with the SMEs. Access to credit can be facilitated if some SMEs come together and pool in funds, which can serve as collateral for loans from commercial banks.

The successful strategies of a cluster, say in Latin America, can be applied here, bridging the cultural divide and help in the revival of traditional products like the bell metal industry in West Bengal or cane and bamboo in the NorthEast. India has also signed a $42 million five-year cooperation programme with UNIDO to boost competitiveness and productivity of industrial enterprises, focusing on employment generation and environment conservation.

How will IIUS help in this?

The IIUS is a highly integrated package of services by UNIDO and the DIPP. Eight selected clusters will be assessed and technical assistance proposals related to energy efficiency, cleaner production and waste management will be formulated for future interventions by UNIDO.

UNIDO stresses on environment protection. How will it help SMEs?

Energy consumption can be reduced by replacing old machines with better technology that generate less carbon -dioxide.SMEs clubbed together as a Special Purpose Vehicle can qualify for carbon credits if they can demonstrate the amount of carbon-dioxide reduction and through this certificate of emission reduction they can claim benefits collectively.