Industrialisation in NE has declined: K Ahmed

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Namrata Kath Hazarika | 18 Oct, 2008
In an exclusive interview to SME Times, K Ahmed, Director, IIE, Guwahati has acknowledged that despite huge potential, industrialisation in North East India has declined.

Experts of the Interview...

For the development of the Micro, small and medium enterprises what kind of initiatives are you taking for supporting this sector?
K. Ahmed: Industrialisation in North East India as it stands today is marked by declining share of manufacturing sector at 4.71 percent as compared to 17 percent at National level since 1993-94. In fact, this share ever has shown a downward trend and has come down in 2002-03. Excepting for the states of Manipur, Tripura and Meghalaya, where the manufacturing sectorâs share is more than the national average, the other states of the region record a paltry growth in manufacturing.

Notwithstanding this growth in the manufacturing sector, efforts at industrialisation of the region continue. A glimpse into its activities so far in the field of entrepreneurship development and motivation in North East India reveals that IIE has been following a multi-pronged approach in entrepreneurship development.

The core competency of the institute, however, has been in designing and organizing different entrepreneurship development programmes (EDPs) for prospective entrepreneurs (Promotion of New Entrepreneurs), existing entrepreneurs (Growth of Existing Entrepreneurs), personnel from promotional and developmental organisations (Creation of Entrepreneurial Environment) and students and teachers from schools, colleges and universities and technical institutes (Entrepreneurship Education), hence addressing different target groups.

During the last 14 years, the institute has organised many a training programme in entrepreneurship motivation and development, successfully infusing and upholding the spirit of entrepreneurship across age groups, gender, caste and sectors, and above all across the diverse spatial planes in the region - Entrepreneurship Development Programmes (EDPs) â be it for promotion of prospective entrepreneurs (women, SC/ST/OBC), product-oriented EDPs on wide range of products with technology back up exposure, location specific EDPs to take training to the doorstep of prospective entrepreneurs, turnkey EDPs where trainees are provided escort services till grounding of enterprises and entrepreneurial awareness programme for creating awareness about entrepreneurial opportunities are the paraphernalia which defined the transfer of government aided support to the SMEs in the region.

At the regional and national level as well, the institute today is the nodal agency for conducting the rural employment generation programme (REGP) for the khadi and village industries commission (KVIC).

The institute is also working in tandem with the Coir Board, Indian Jute Industries Research Association and the International Network for Small and Medium Sized Enterprises to support entrepreneurship growth and development activities in North East India and beyond.

Thus, KVIC schemes for cluster development like Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Coir Board programmes, programmes from the Ministry of Science and Technology, Ministry of Food Processing, Rural Industries programmes under SIDBI are some of the programmes which have percolated down to the grassroots and thus have been transferred in letter and spirit.

As the instituteâs research mandate covers all the eight states of North East India, besides training, the institute also has been carrying out research on subject matters bearing significance in the field of micro, small and medium enterprisesâ development. The studies have highlighted various problems related to the MSME sector. This in turn has helped in making intervention critiques for MSME development.

For the last few years, there has been a change in orientation of entrepreneurship development programmes with reengineering of the programmes towards area approach. The Indian Institute of Entrepreneurship (IIE) too having developed the competency, professional expertise in entrepreneurship development and management, has rightly diversified its field of training and research into various forays including the area approach, and is fittingly today, the regional centre for SME development.

Thus stated, IIE is all set to playing a pro active role in catering to the needs of the micro and small enterprises in the region in the coming years through the cluster approach creating backward and forward linkages and thus bringing about a holistic development. Under area approach endeavor, IIE of late is into industrial cluster development in the region as highlighted in the XIth Plan Document along with Vision 2020 which calls for hands-on and right interventions in the least intervened areas in the region so far â the village and traditional micro and small industries which have been working in exclusivity in water tight compartments catering mostly to self consumption needs so far.

More so with the investment limits redefined in the Micro, Small and Medium Enterprises Act, 2006, it is the languishing village and traditional industries in the region â the micro and small enterprises which call for coordinated efforts at reviving and rebuilding them providing the scope to access the niche market at large with new innovated and diversified products with right interventions in creating awareness, social capital building, product development and market access. The Handloom cluster in Imphal East in Manipur implemented by IIE is such a case in point.

Your institute is under the Ministry of MSME. Could you tell us whether it is a government undertaking or government supported? How are you transferring the support from the Ministry of MSME to the small and medium enterprises (SMEs) in the North Eastern Region? Elaborate?
K. Ahmed: Yes, the Indian Institute of Entrepreneurship is under the Ministry of MSME, Government of India. With an aim to undertaking training, research and consultancy activities in the small industry sector focusing on entrepreneurship development, the institute was established in the year 1993 at Guwahati by the erstwhile Ministry of Industry (thereafter Ministry of Small Scale Industry and now, the Ministry of Micro, Small and Medium Enterprises) Government of India as an autonomous national institute.

The institute started its operations from April 1994 with North Eastern Council (NEC), Government of Assam, Arunachal Pradesh and Nagaland, and SIDBI as other stakeholders. The policy direction and guidance is provided to the institute by its Board of Management whose Chairman is the Secretary to the Government of India, Ministry of MSME.

In letter and spirit, the institute has been striving to transfer all support from the Ministry of MSME to the small and medium enterprises (SMEs) in the North Eastern Region. The Ministry of MSME is extending all support for development of MSMEs in the region â be it through sponsoring various studies on the MSME sector, conducting many an entrepreneurship development programme, setting up of the Business Facilitation and Development Centre (BFDC) at IIE through which the institute has been rendering all help to the entrepreneurs in drawing projects proposals for grounding units, or the state of the art Jewellery Designing and Manufacturing Training Centre which has been set up as a forward linkage to the existing Gemstone Cutting and Polishing Training Centre in the instituteâs premises to train the youth in jewellery designing and manufacturing.

Besides, the Ministry is also aiding in giving exposure to the entrepreneurs from the region through its International Cooperation Scheme through which different Business Delegations organised by IIE comprising entrepreneurs from various fields and sectors from the region have been taken to countries like Thailand, Malaysia, Singapore, Indonesia, China, Hong Kong, Korea, Japan and Egypt and Israel for exploring business opportunities, networking, and exchange of ideas and inspiration.

In support of the idea of developing clusters, the institute is transferring government support to the micro and small entrepreneurs via product diversification and development, technology transfer, skill development and market access. Infact, the institute is implementing a handloom cluster in Imphal East, Manipur besides being the technical agency for eleven SFURTI (scheme of fund for regeneration of traditional industries) clusters in North East and East India.

Today, even more opportunities have opened up with the Ministry of MSME mandating the institute as the Regional Resource Centre on cluster development (RRC) and as the Gateway Agency for development of Rural Business Hubs (RBH). And truly, the institute is working towards it and has opened state centres on cluster development in all the eight state capitals of North East India.

Is this type of business institutes worth for entrepreneurship skill development? Enumerate your views?
K. Ahmed: Firstly, let me make this clear. The Indian Institute of Entrepreneurship is not a business institute per se. As I have mentioned this is an institute for inculcating the spirit of entrepreneurship in North East India through trainings, research and consultancy. This type of institutes inculcating the spirit of entrepreneurship indeed can be beacons for development of entrepreneurs provided there is support from the society at large. Here, we all must agree to the fact that the Indian Institute of Entrepreneurship is the only institute in the North Eastern region catering to the need for entrepreneurship development. And in a society in search of white collar jobs where entrepreneurial option is the last option of eking out a living, entrepreneurship skill development indeed calls for bona fide efforts on field beyond papers.

As the fee structure of most of the big management institutes is usually pretty high, which is beyond the reach of the MSME sector? What is exactly your institute doing in such cases?
K. Ahmed: IIE is not an institute which can be equated with any of the big management institutes in the country in any aspect whatsoever. So the question of putting the institute against any of the management institutes in the country and comparing the fee structure does not arise here.

IIE is open to the MSME sector for all help and support in terms of training, consultancy and handholding facility. Besides consultancy service, the institute as already mentioned is into giving many a training programme to the entrepreneurs from the micro, small and medium enterprise sectors.

These consultancy services and training programmers are rendered free of cost. Of course, most of these training programmes are sponsored by the different departments under related ministries which are catering to the needs of development of micro, small and medium enterprises in the country.

In India there is a dearth of quality people in industry, which demands high level of entrepreneurship development program through out the country for the growth of Indian economy. What is your take on this?
K. Ahmed: Yes, I do agree that there is a dearth of quality people in industry, which demands high level of entrepreneurship development programme throughout the country.

But let me here stick to the job that we render. IIE is more into developing the grassrootsâ entrepreneurs who look for handholding facilities in aspects that are basic â beginning with training in all aspects in grounding a small scale unit.

Here the question of high level entrepreneurship development programmes does not arise. And, IIE has been providing these very basic training programmes to the prospective entrepreneurs.

But here I must categorically state that we lack an exclusive and definite policy on entrepreneurship development. And, it is time that the government thinks in this direction to have a clear policy on entrepreneurship development.

Due to the globalization of business and trade related activities there is a vast need for harmonizing the accounting, reporting techniques, trade related activities and improving skill of manpower in the country, which is perhaps a challenge for the emerging economy of India. What is your take in this context?
K. Ahmed: True. Due to the globalization of business and trade related activities there is a vast need for harmonizing the accounting, reporting techniques, trade related activities and improving skill of manpower in the country, which is perhaps a challenge for the emerging economy of India and more so for North East India.

North East India, as you know happens to share 98% of her boundaries with foreign countries and is today envisioning a future with her neighbours crossing boundaries. Both North East India market and South and South East Asian markets infact have to offer much in terms of trade related activities in the coming years and this is a challenge for the re-emerging SME sector of North East India - a challenge in not only identifying the products, sectors and services which can be traded but a challenge to provide all necessary handholding facility in helping the SME sector grow.

A greater challenge lies in the context of improving the skill of manpower in the region. Infact with North East India coming up with the highest number of young working populace by 2020, the challenge is to have more ITIs, more entrepreneurship and skill development programmes to aid the growth of trained entrepreneurs in the real sense of the term.

What are challenges that SMEs in the North-Eastern regions are facing these days?
K. Ahmed: With the liberalisation and globalisation of the Indian economy, the small enterprises indeed have unprecedented opportunities on the one hand, and face serious challenges, on the other. While access to global market has offered a host of business opportunities in the form of new target markets, possibilities to exploit technological advantage, etc, the challenges in this process in North East India have flowed mainly from their scale of operation, technological obsolescence, inability to access institutional credit and intense competition in marketing.

An important aspect which needs urgent attention for the traditional and village industry sector is technology up gradation. This as mentioned above is especially important in the context of the globalised competitive environment in the micro and small enterprise sector and the pressure of cheap alternatives available from multi national companies.

Through technology up gradation, the micro and small enterprises can not only capitalise on the skill and resource base of the region and produce better quality finished products but also can reduce the cost of production thus making the products more competitive.

Meanwhile there are occasional bandhs and strikes in the north-eastern region, in fact the communal disturbances is another major issue creating panic in the states of the North Eastern Region. Due you think with this kind of problems, North East can be called the right place for business establishments? What is your opinion on this issue?
K. Ahmed: Bandhs and strikes are reality here. But that do not deter developmental activities. Infact, IIE has been implementing a Handloom cluster in East Imphal in Manipur one of the states worst hit by insurgency activities for more than last two decades. Things are happening in both fronts.

But I believe that development should precede peace. The state governments of the respective states should clear the way for development via creating necessary infrastructure be it building the roads or generating enough electricity.

Even though 64 percent of the population in North-East is literate, do you think North-East is getting adequate support and help from the government for entrepreneurship development?
K. Ahmed: Literacy is another ball game all together which dresses people more for white collar jobs and most literates find entrepreneurship the last for livelihood generation. So it is not a question of whether adequate support and help from government has been arranged for this 64%.

It is more a question of orienting the mindset of this 64% literate into taking up entrepreneurial challenges in the region. No doubt a daunting task that requires all efforts at reorienting these mindsets.

Could you shed some light on what kind of support you are getting from the government?
K. Ahmed: Yes. The Ministry of MSME along with other Departments like the Department of Khadi and Village Industries Commission, Department of Science and Technology, National Small Industries Corporation, SIDBI etc are supporting many a training programme for the entrepreneurs of North East India. Infact, as I have already mentioned, we through the RRC and RBH is trying to dovetail many a schemes of the different agencies and departments.

At times though it becomes difficult to garner support, on our part we are trying our best.