Crunch situation for small sector

Falling demand for their products, globalisation, acute cash crunch and availability of cheap chinese products are crippling medium and small scale industries in Punjab and Haryana. The worst affected are engineering, hosiery, worsted spinning and re-rolling industries which are concentrated in the major industrial centres, including Ludhiana, Gobindgarh, Mohali, Amritsar and Faridabad.

As a result, scores of medium and hundreds of small units have already closed down. The state government is taking several measures including continued subsidy on loans for technology upgradation to enable small scale units to become competitive.

Two other major factors aggravating the crisis are a liquidity crunch which has become acute and reduced purchasing power, particularly of the middle class. Bank credit isn't readily available to the medium and small scale units. Although Punjab farmers have earned heavily from their paddy production, it has not had any visible impact on enhancing their purchasing power. This is mainly because a bulk of the money has been utilised for paying back loans.

Laghu Udyog Bharati has been demanding a level playing field for SSIs. To enable the units to become more competitive, incentives like cheap loans and uninterrupted power supply are needed. 

SMEs to fuel ERP growth

Though large organisations now display greater awareness about adoption levels regarding enterprise resource planning (ERP), it is the SME segment that is expected to fuel its growth. The awareness level increases from about 31 per cent in the SME segment to over 88 per cent in large organisations. Among SMEs, the awareness level regarding ERPs is the highest in the services segment. Among the larger organisations it is the IT sector that scores on this front. About 1.4 per cent of SMEs which are aware of ERP have already implemented it while about 19 per cent of them are in various stages of implementation.

12 percent capital subsidy for SSIs

The Tamil Nadu government has introduced a capital subsidy scheme for SSIs in select sectors for technology upgrades. Under the scheme, a 12 per cent back-ended capital subsidy will be admissible on loans advanced to SSI units by banks, designated SFCs. The scheme will be in operation for five years beginning October 1, 2000 to September 30, 2005 or till the sanctions of capital subsidy by the nodal agency SIDBI, reached Rs.600 crore, whichever is earlier.