Bleak Export Prospects Hit Small Industry Falls

The business situation for the small industry has deteriorated this year as compared to the previous year, with the export scenario presenting a grim picture. This was the overwhelming response of the small industrialists who were approached by the Confederation of Indian Industry (CII) for a study on the business scenario of the small industry.

The CII had conducted the 13th Business Outlook Survey on a sample of 405 small industry units from all over the country to determine the views of the small industrialists on the general business scenario of the small industry and on the different policy measures taken up by the government from time to time.

 

The survey revealed that 62 per cent of the respondents felt that the general business situation for the small industry had deteriorated this year, compared to the previous year. Thirty per cent found it to be the same and only 8 per cent found an improvement in the scenario. Besides, 48 per cent felt that the situation in the export front has worsened this year. Around 41 per cent found it to be the same and only 11 per cent saw an improvement in the situation.

In comparison to last year where only 15 per cent of the respondents expected negative growth in turnover, this year 33 per cent expected a negative growth, 26 per cent expected the turnover to grow between 0-5 per cent, 19 per cent expected it to grow between 5-10 per cent and 22 per cent of the respondents expected above 10 per cent growth.

Besides, 40 per cent of the respondents felt that exports order volume would decrease, while 39 per cent expected it to remain the same and only 21 per cent expected an improvement in the situation.

Most of the respondents welcomed the policies announced for the small scale industry. They welcomed the increase in investment limit from Rs 60 lakh to Rs 3 crore. Around 46 per cent of the respondents mentioned that the increase had made a favourable impact on their company, 38 per cent suggest that the increase had not made much impact and only 16 per cent said that the policies had an adverse affect on their companies.

The respondents felt that delayed payments by large industries, insistence on collateral security by banks, and unnecessary bureaucratic interventions were major factors restraining the growth of small industries.

According to the survey, the factors affecting exports in the next few months would be: high prices, lack of credit availability, outdated technology, lack of information on markets abroad, duty drawback, poor packaging system, poor infrastructure facilities, delay in clearance in customs, high cost interest and lack of quality control.