Innovative Approach to SMEs…

- Mr. Vitahal Kamat
President, MEDC

MEDC had the privilege of having Dr. Y K Alagh, Eminent Economist and Chairman IRMA, delivering
the 7th D R Gadgil Memorial Lecture in Mumbai. He chose the very contemporary and live topic of SME Sector – Structure and Policies.

As expected the Lecture was lucid, thought-provoking and had a lot of “Real Life” insights. Rich in content, Dr. Alagh Lecture also contains historical evolution of the now-common
phenomenon of Clusters, of SMEs.

Dr. Alagh makes a very crucial distinction between 2 types of SMEs. A very vast section of SMEs is government protected, subsidy-driven, incentive-driven. On the other hand, several groups of small companies have been surviving, thriving and prospering as informal enterprises having unique networks and more important, reaching out to global markets. Dr. Alagh calls for a radical change in the approach to finance this second type of Clusters – based on the principle of “payment against export order” ( details will be available in the Text of the Lecture to be published next month in the Digest ).

We believe that the spirit of entrepreneurship is visible in million of individuals across sectors and across regions in India. These “informal yet innovative enterprises” have to be fostered and nurtured with adequate institutional mechanism, infrastructure support and proper channels of timely financing. As Dr. Alagh mentioned that, time has now come for these “Micro-Reforms” which need to be implemented sooner rather than later….