During the occasion, Dr. Singh said, “The Ministry of Micro, Small and Medium Enterprises (MSMEs) call centre will satisfy the need of a single point facility providing a wide range of information and accessibility of banks to such units. This initiative would help in expanding the outreach of support provided under the various schemes and programs of the government.”

Toll free number for ‘Udyami Helpline’ is 1800-180-6763 and the working hours of this Helpline shall be 6 am to 10 pm. Here, SMEs can find all required information and guidance on availing bank loans, setting up new units, project profiles and knowledge about other MSME schemes.

First generation entrepreneurs faced a lot of problems in finding credit, technology and even in marketing. But now the SME problems will be solved and they can even lodge complaints with Central and State Government agencies. The call centre facility is made available in both English and Hindi languages.

GIDC has reserved 1,000 hectares of land from its 4,000-hectare Dahej Special Economic Zone industrial estate. This reservation is for SMEs in chemical and engineering industries. SMEs in chemical zone will be given 350-400 hectares and in engineering units will be allotted 600-650 hectares. The idea is to make the zone self-sufficient whereby the wastes of smaller units become raw materials for larger companies and vise versa. Hence, the production of products and by-products can become a continuous process.

Arvind Agrawal, GIDC managing director, says “GIDC will give preference to those SMEs from chemical and engineering sectors which have forward and backward linkages with large enterprises already present in the estate in Dahej. The idea is to create an environment where hardly anything gets wasted, and everything gets utilised within the industrial fraternity at Dahej.”

Gujarat State Fertiliser Corporation (GSFC), Gujarat Alkalis and Chemicals Limited (GACL), and Gujarat Narmada Valley Fertiliser Corporation (GNFC) have been asked to work in tandem with GIDC. The idea is to promote the establishment of SMEs nearby plants of these three companies. This will help both small and large companies to reap the benefits of using each other’s by-products and raw materials for making their own products.

It is a Business initiative to improve quality, delivery and reduce cost of production. The scheme is a curb on waste that includes inventory, over-production, over-processing, transportation and defects. The Union government is slated to spend 80 % of the project cost. The development commissioner, MSME, will be responsible for execution of projects through a special purpose vehicle (SPV) established by SME clusters.

Presently, clusters have been formed by SMEs in Mohali and Baddi (Himachal Pradesh). In Mohali, SMEs manufacture bathroom fittings and accessories, and in Baddi engineering goods are being produced. Manish Trehan, manufacturing consultant for the Mohali and Baddi clusters, says, “The participating units will be assisted in becoming ‘lean’ through better planning, better manpower allocation, better space utilisation, scientific inventory management, improved process flows and reduced processing time with the application of lean manufacturing techniques.”

The programme has been initiated with a tri-partite agreement between PGSTE, the SPV formed by the cluster and National Productivity Council. It has been agreed upon that to reduce “waste” (“non-value added” activities) when it comes to manufacturing, is essential for sustainable growth and competiveness building.

In the pilot stage of the Lean manufacturing scheme initiated by MSME ministry, forming 100 mini clusters averaging 10 MSMEs per cluster have been targeted. After achieving this, another 1,000 MSME clusters in the entire country will be formed.

Guidelines on how to successfully conduct IT service business with SMBs.

Look for Smaller projects

When working with SMBs look for smaller and longer projects rather than big projects and short engagements. There is no need to do a large fixed cost project with SMBs. Instead break up the big projects into smaller assignments. Take one project at a time, deploy it, finish it, get payment and then go for the next project.

Change Management

Changes are inevitable for any project and while working with SMBs you have to be comfortable with rapid changes. It is not possible to nickel-and-dime small change requests. But then it is possible to convince the customer of cost and time implications related to a change. The principle of ‘collaboration over contract’ can work good. It is also good practice to record small changes even if you are not charging the customer. What is important is to be flexible and not to raise hue-and-cry for every change request. But at the same it is vital to make the customer understand that changes cost money and time. So, working in short sprints and not making major changes during the sprint can be a good method to execute projects.

Provide solutions Iteratively

While executing a project maintain constant contacts with the client and develop software iteratively. The iteration or sprint should last for 2 to 3 weeks. At the end of an iteration spell deliver working software for the end user and get their feedback. Never impose solutions to clients as they are domain experts though you may be an IT expert.

Hiring developers

While working with SMBs you have to be very judgmental about hiring developers. Hiring developers from big organization may not work as they work in silo environments with analysts documenting requirements, architects designing solutions, and QA team validating results.

In SMBs developers have a greater role to play than just making codes. Direct customer interaction, being a solution architect, business analyst and usability experts are expected from developers.

Reduce Total Cost of Ownership

It is important to make short term sacrifices in order to make long term gains. Trust of clients deepens and it becomes possible to do continuous business by not becoming concerned about immediate cost to the company but concentrating on long term savings. For example, purchasing a commercial database may be more expensive for a company due to the license costs and other future costs involved as the system grows. So, clients need to be educated about the pros and cons of commercial database. Open source can be a good alternative.

Mobile Phone Access

Dependence on Application Programming Interfaces (APIs) is essential as most SMB owners and employers remain on a move and they make use of mobile phones and desktop browsers to receive alerts, realtime data and reports. This helps them to take quick decisions.

Cloud computing Dependence

Investing in capital items like servers and firewalls may not be all that fruitful for SMBs and startups. It is an expensive proposition as they have to employ people for running it effectively. Instead signing with cloud computing service providers may be much more beneficial as they offer a pay-as- you-go-model. There is zero upfront capital investment and there is the option to scale higher with the business development.

Open Systems

To build a subsystem can be necessary for making an integrated system. Software as a Service (SaaS) application that provide project management, document management, timesheets, expense tracking, accounting, and payroll services can be ideal. This will help speed up the system development process and help to create integrated system experience for your client.

Mr. Mukerjee said, “Though there is some tightening of monetary policy by the RBI we do not expect banks to raise the lending rates. The banks are aware of the actual liquidity position. They (banks) seem to have adjusted their lending plans accordingly.”

In the recent monetary policy unveiled by RBI on July 27, it is found that for commercial banks short-term borrowing and lending rates (repo rate and reverse repo rate) have been heightened. This is done to adjust the excess liquidity in the money market. With such hikes there is apprehension that banks will raise lending rates as cost of borrowing has increased. Lending rates of PSU banks such as Punjab National Bank and Union Bank of India have increased. SBI so far did not make hikes in lending or deposit rates.

O P Bhatt, SBI Chairman, present in the meeting, said, “RBI is always sensitive enough to see that liquidity level is always maintained at reasonable level to meet the fund requirements of banks.” When asked what could be the possible hike in rates, Bhatt said, “It will differ from bank to bank depending on individual bank’s business strategy. But we think if at all there will be any hike it will be marginal—much less than 75 basis points.”

Reviewing the performance of PSU banks, Mukherjee appealed to banks to step up credit disbursements to sectors of the economy like agriculture and industry especially the job oriented SMEs. The minister also urged banks for issuance of Kissan Credit Cards (KCDs) by 20 per cent increase in the current fiscal.

The state government has already allotted plots to 28 entrepreneurs in Bhatwanisain. Malini Choudhary is one such entrepreneur who is investing Rs 1.31 crore to set up an ayurvedic medicine manufacturing unit here in Bhatwanisain located at the Rudraprayag district.

State Infrastructure and Industrial Development Corporation of Uttarakhand Limited (Sidcul), is been given the responsibility to help improve infrastructural facilities in the industrial estates. S C Nautiyal, additional director, industries department says, “Scores of mini units, mostly in the manufacturing business, are coming up in these industrial estates after a gap of more than 30 years.”

Entrepreneurs are focusing in sectors such as ayurvedic medicines, food processing, mineral water, furniture, steel fabrication and herbal products. A special VAT rebate of 90 per cent is offered by the hill industrial policy. An interest subsidy on loans provided by banks and other financial institutions is available to eligible entrepreneurs.

Steps are being taken by the State government to develop other remaining estates as well. This is done by allotting plots to individuals and companies at other mini industrial estates. Saronth in Tehri district is one good example.

“Our research indicates confidence levels in the emerging markets are stable. SMEs in India are not changing their business strategy in the next six months, despite the global uncertainty. This bodes well for the Indian economy,” says Dheeraj Dikshit, SME Business Head, HSBC India.

The latest wave is a survey conducted on 6,300 SMEs whose annual sales turnover is US $10m. These SMEs are spread across 21 markets such as Middle East, Asia, North America, Latin America and Europe.

Confidence levels of Global markets

Confidence levels of developed markets increased 9 points from 106 to 115. Confidence level of the entire globe increased from 111 to 118. The emerging markets showed an index of 122 that is seven points higher in comparison to developed markets that showed 115.

Positive confidence levels in Asian Markets

Since the financial crisis, Asian markets have shown signs of positivity for the first time, according to the survey. The positive waves are in terms of their economic growth, recruitment and CAPEX plans. Among the most confident countries surveyed, Vietnam ranks first with 164 index mark, Singapore (136), mainland China (123) and India (121).

The focus of the IT policy 2010-15 is on start up companies, IT products, SMEs and women entrepreneurs. Promoting women’s participation in the ICT sector is also its objective. More e-governance projects in local languages are also on its agenda.

At present there are 1,200-odd IT and IT-enabled Service (ITeS) companies. Out of these, 70-75 percent belongs to the SME category earning annual revenues not exceeding Rs 100 crores. A company is considered a start up if its annual return is between 50 lakh and 10 crore, with 50 employees and operating for less than five years.

The government has made provisions to grant incentives in the form of 25 per cent power subsidy to start-up companies, 25 percent reimbursement for premises rental expenses and recruitment assistance of 2.5 lakh per 50 persons recruited.

L Suresh, president IT and IT-enabled Service Industry Association of Andhra Pradesh (ITsAP) says, “Usually, SMEs are good at executing projects. But because of their size, they are disqualified from participating in large projects. Earmarking about 10 per cent of e-governance tenders for SMEs will ensure that companies will have a level playing field.”

To market intelligence, prepare research reports & analysis for SMEs, understand new trends in technology, the Andhra Pradesh government will create libraries with support from NASSCOM, IT Exporters Association, Software Technology Parks of India, ITsAP and Institute of Electronic Governance. For the libraries, Rs 10 lakh fund will be facilitated so that the SME sector can grow. In order to evaluate the strengths of SMEs, the government shall tie up with business analyst firms. This will enable smaller ICTs to establish linkages with bigger firms and help SMEs to find international markets.

Andhra Pradesh has set a target to raise its export value to Rs 70,000 crore by 2015. The current value is 32,000 crore. The state provided 2.51 lakh employment in 2009. New employment for 125,000 people is being targeted. IT sector’s export is 50 percent of the total exports from other sectors in the state.

So far, SMEs of the country did not witness much support from private equity (PE) players because of a low capital base. Rajeev Krishnan, executive Vice President, SBI Capital Markets, says “The SME fund will be used to rope in private equity investment in SME, which otherwise is facing dearth of capital for furthering its business growth.”

FPOs (follow-on public offers) and financial services are also being guaranteed by SBI Capital Markets Ltd in this fiscal. This will definitely attract revenue growth as the PE funds are utilised to invest in the company’s growth phase. Krishnan says, “We expect to witness a 60 per cent rise in our revenue to Rs 1000 crore by end of this fiscal on the back of higher earnings from advisory services.”

Opportunity in the advisory space is further magnified by the central government’s disinvestment programme in public enterprises. $9 billion worth of proceeds is likely to be generated in the current financial year. A larger role is anticipated in ‘mergers and acquisitions’ from investment banks as it is going to leverage SBI’s banking relationship with other Indian corporates.

SBI caps in the last financial year had made loan arrangements of Rs 187,000 crore. In 2009, SBI caps concentrated in five major equity issues that generated Rs 136.5 billion. Mega issues like National Hydro Power Corporation (NHPC) Ltd raised $1.25 billion and Adani Power raised $630 million from the capital market.

Since the PMEGP launch in 2008, one lakh projects have been sanctioned and 10 lakh people employed. Out of the total loans sanctions, 15 percent is for SC, 7.5 per cent for ST, 27 per cent for OBCs, 5 percent for minorities and 30 percent for women. The general category entrepreneurs can find a subsidy of 15 percent and 25 percent on the project cost. The weaker sections of society can avail 25 per cent and 35 per cent subsidy.

Dinsha Patel, minister of state for MSME, has urged CMD of banks to issue policy circulars to all financing branches so as to fulfill the allocated targets. He said that the disbursements this year has been just 10 percent of the target. What is important now is that Khadi and Village Industries Commission (KVIC) should reach every village. The KVIC is the nodal agency for the implementation of PMEGP .

The Union Bank of India and KVIC signed an agreement for a ‘one bank, one nodal branch’ formula. This concept shall enable a single nodal branch to be used to coordinate with all other branches of the bank spread in the entire country.