SMEs Currently Need Credit Access, Growth Capital: Srinath Sridharan

SMEs are driving the Indian economy, big industries rely on SMEs as a support system in their supply chain while creating jobs and products for the market. The SME sector has become one of the most significant sectors in the Indian economy lately and for all good reasons.

“We are actually dealing with lives and livelihood of more than 11 Crore Indians, there roughly 6 crore MSME or SMEs or single-member units and this entire sector contributes to over 30 per cent of our GDP and it does not have the glamour value but they are the real drivers of the economy," said the Corporate Advisor Srinath Sridharan. 

The micro, small, and medium enterprises (MSMEs) are perhaps one of the hardest hit due to the COVID-19 lockdown in India. Keeping this in mind, the government has announced a stimulus package focused only on the MSME sector which will provide much-needed support to the stressed MSME sector. 

“In the last two years of COVID-19 economy, we have seen a lot of hand-holding packages that the government has brought in. Are these proactive measures to enhance credit to the sector? No, not really. What do the SMEs currently need is credit access, growth capital, they want to become export-oriented firms, use digital platforms to find new markets and probably enhance their quality to attract a global audience, all of this needs money," said Sridharan.

This new decade is being named as “Techcade" for India, with all the digitisation happening across industries. "While I don’t see large tech companies to come and create marketplaces it's encouraging to see startups come up, which are focused on ‘Bharat’ and not just ‘India’. Can we make products for the world is the big question? If we look at China, they manufacture for the world and the products don’t come from Shanghai or Beijing, it comes from smaller towns. We have to implement the same without SMEs, promoting quality, speed and speaking the global language. Why can’t our SMEs be manufacturing for the world?” 

The contribution of MSMEs to the economy is immense. Not only do they contribute to creating more jobs, but they also add to the bigger picture like GDP.

Talking about how SMEs can contribute to the 5 trillion goals of the Indian economy, Sridharan said, “There are 6 C’s we will have to look at – Capital, we need to bring in a lot of it. Compliance – We will have to reduce a lot of it. Competency building – Training SMEs to go global. Communities – Creating an ecosystem of SME communities. Credit Access – Leading to leverage this business. Connections – Building connection networks using digital for SMEs.”  

Sridharan shared his views at the BW SME World Presents Emerging Business Summit & Awards held virtually due to the ongoing COVID-19 pandemic.