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Change in sentiments will bring SMEs back to path of growth
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Bikky Khosla | 28 Apr, 2009
Since last year we have seen the demand for products dwindling rapidly as our key markets across the globe slipped into a recession. Sagging demand saw a pause in production which in turn meant mass-scale job losses.
The government of India had announced a slew of measures to cushion the impact of the global slowdown on the Indian economy.
There were steps taken to inject liquidity into the banking system to permit banks to alter their interest in the stimulus packages. Banks have reduced interest rates by many counts and are giving priority to SME lending.
Having said that, the sentiments have not changed. The confidence that we saw amongst SMEs before the recession is still missing. SMEs have delayed projects for fear of bottoming out, while banks are now over-cautious while lending to SMEs. So when sentiments are hurt and the confidence level is low, the measures announced in the stimulus packages will have no soothing effect on SMEs.
The new government which will now come to power will have to adopt more sustainable stimulus plans to ensure long-term inclusive growth. Above that, to ensure that the stimulus packages are a success, a concerted effort on the part of the Centre and the State Governments is required.
The government needs to ensure measures for banks to lend to SMEs as a way of combating a shrinking GDP, and industrial output. Along with a reduction in interest rates and taxes, the government needs to insist that the vital flow of bank finance to small firms is maintained.
SMEs too need to understand that it is not about only producing or manufacturing goods, it is more about marketing; more about how at the end of the day you will be selling your products. No government policies, stimulus packages can help you in this. It has to come from within and depends on how successful you have been in creating a low budget, high impact marketing plan.
At this point of time and in the current economic conditions, it is imperative that every SME sets realistic marketing objectives, which is very important. As finances are limited, picking up a handful of objectives, preparing a smart marketing strategy and choose the right marketing tactics to achieve your goals is of utmost necessity.
My point is that when we can see that the stimulus packages announced by the government are not working or fall below our expectations, we need to look inward and find the answers that can take the SMEs back on the road of growth.
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When Will the Economy Recover from Recession?
Rajeev | Tue May 5 01:54:19 2009
Any one can tell me that - When Will the Economy Recover from Recession?
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Re: When Will the Economy Recover from Recession?
Ravi shankar | Sun May 10 13:12:40 2009
Sir
It is a chain of looting event that led to recession. For eg: we become very greedy and started increasing the price of the product, since we started making money government's thought why should we not hence they increased taxes since all taxes have to be paid by the end user(including our income tax and ineffiency ) we increased the cost of product further. Now this should get reversed, to reverse this process govt's should reduce taxes and also introduce and limit the price of the product by profit margin limit. when will this happen no body knows as of now except industry no trader has felt the pinch of it,it that looting spree that has led to this recession. it is the governments to start non looting action to end recession.
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