SMEs say good rating would allow them to access finance easily
Updated: Aug 02, 2013 04:20:54pm
Chennai, Aug 2 (KNN) In order to improve productivity and competitiveness of the industrial clusters in the country, the planning commission has proposed to introduce a rating index that would benchmark industrial clusters.
The cluster competitiveness index, proposed by the Planning Commission as a tool to market the over-6,000 existing clusters in the country, will evaluate and benchmark them on various fields of performance and competitiveness.
There are around 1157 SMEs (industrial) and approximately 6000 artisan/micro enterprises clusters estimated to exist in India.
The index is expected to come into force from 2014, the proposal is greeted with optimism by many SME clusters as they believe it will help establish the clusters as brands with ratings.
“It is a very good initiative as it will improve the brand quality of the clusters. If good ratings help SMEs get finances easily from banks, it will be of great use and help,” said President of the All India Skin and Hide Tanners and Merchants Association, Rafeeque Ahmed.
However, Ahmed suggested that there should be different standards of rating the small, medium and micro enterprises. The same practice should not be applied for all, he added.
India has not been able to successfully generate enough investor interest in its special trade zones, and lacks a policy on standards for industrial clusters. The Plan panel feels the index could be a first step toward improving the productivity and competitiveness of industrial clusters in the country.
“It is a very good idea and it will be good for the organizations, as they will give their best in order to get good ratings. That will improve both our productivity and competitiveness,” said E Shanmugam from Perungudi Engineering Cluster Pvt Ltd.
According to a media report, the project will begin on a pilot basis in about 60 clusters, including apparel clusters in Ludhiana and Tirupur, leather clusters in Chennai and Agra and diamond clusters in Surat. The Plan panel has already invited bids from the agencies concerned and is expected to shortlist a consultant for the task in a month's time.
A study conducted by UNIDO a few years ago showed that Indian clusters face impediments like technological obsolescence, relatively poor product quality, insufficient information, poor market linkages, inadequate management systems, power shortage and a host of other problems. As a result of liberalization, Indian SMEs including the competitive ones have to deal with pressures from international markets.
Clusters have been existing in India for decades but they have failed to attract enough attention for lack of set standards, best management practices and technology.
In fact, clusters have been in existence in India for centuries and are known for their products at the national and international level. India has more than 6400 clusters.
These have been typified as industrial, handloom, and handicraft clusters. Clusters represent the socio-economic heritage of the country where some of the towns or contiguous group of villages known for a specific product or a range of complementary products that have been in existence for decades and centuries. In a typical cluster, producers often belong to a traditional community, producing the long-established products for generations. (KNN/SD)
Feedback: newsdesk@knnindia.co.in
The cluster competitiveness index, proposed by the Planning Commission as a tool to market the over-6,000 existing clusters in the country, will evaluate and benchmark them on various fields of performance and competitiveness.
There are around 1157 SMEs (industrial) and approximately 6000 artisan/micro enterprises clusters estimated to exist in India.
The index is expected to come into force from 2014, the proposal is greeted with optimism by many SME clusters as they believe it will help establish the clusters as brands with ratings.
“It is a very good initiative as it will improve the brand quality of the clusters. If good ratings help SMEs get finances easily from banks, it will be of great use and help,” said President of the All India Skin and Hide Tanners and Merchants Association, Rafeeque Ahmed.
However, Ahmed suggested that there should be different standards of rating the small, medium and micro enterprises. The same practice should not be applied for all, he added.
India has not been able to successfully generate enough investor interest in its special trade zones, and lacks a policy on standards for industrial clusters. The Plan panel feels the index could be a first step toward improving the productivity and competitiveness of industrial clusters in the country.
“It is a very good idea and it will be good for the organizations, as they will give their best in order to get good ratings. That will improve both our productivity and competitiveness,” said E Shanmugam from Perungudi Engineering Cluster Pvt Ltd.
According to a media report, the project will begin on a pilot basis in about 60 clusters, including apparel clusters in Ludhiana and Tirupur, leather clusters in Chennai and Agra and diamond clusters in Surat. The Plan panel has already invited bids from the agencies concerned and is expected to shortlist a consultant for the task in a month's time.
A study conducted by UNIDO a few years ago showed that Indian clusters face impediments like technological obsolescence, relatively poor product quality, insufficient information, poor market linkages, inadequate management systems, power shortage and a host of other problems. As a result of liberalization, Indian SMEs including the competitive ones have to deal with pressures from international markets.
Clusters have been existing in India for decades but they have failed to attract enough attention for lack of set standards, best management practices and technology.
In fact, clusters have been in existence in India for centuries and are known for their products at the national and international level. India has more than 6400 clusters.
These have been typified as industrial, handloom, and handicraft clusters. Clusters represent the socio-economic heritage of the country where some of the towns or contiguous group of villages known for a specific product or a range of complementary products that have been in existence for decades and centuries. In a typical cluster, producers often belong to a traditional community, producing the long-established products for generations. (KNN/SD)
Feedback: newsdesk@knnindia.co.in
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