Micro, Small and Medium Enterprises (MSME) sector in Odisha seemingly is in the intensive care unit. Sickness in MSME sector in Odisha is flaring up like an epidemic as the sick MSME units have grown exponentially by a stupendous 269 per cent since 2011.
However, the Industrial Policy Resolution (IPR) – 2015 launched recently has failed the sector as it prescribed only placebo doses.
With over 4,960 sick MSME units identified in the State in 2011, the sick list apparently has shown a geometric progression to touch around 18,337 in 2014. The sick units in Odisha have shown a spike of over 56 per cent in last year alone. The enormity simply gets further compounded by a dip in the annual growth rate of filing of Entrepreneurial Memorandum – II from over 7 per cent in 2013 – 14 to around 6 per cent in 2014 – 15. Significantly, the growth rate was around 30 per cent in 2011 – 12. This reveals the slowing down of ‘Start-ups’ in Odisha during the two consecutive years and experts blamed the slow down on growing number of sick units in State.
However, the new Industrial Resolution Policy (IPR) – 2015 apparently has failed to come up with any comprehensive initiatives to tide over the brewing crisis.
Interestingly, MSME industry associations here get stumped when the IPR-2015 proclaimed that owing to intensification of industrial activities in the State, when it is slowing down at the ground-level, more opportunities would throw up thereby giving the sick units a chance to make a turnaround.
Sample how a State like Gujarat handholds its sick MSME units. Since sickness in MSME is an offshoot of obsolete product/technology, poor management, financing or marketing problems, the Gujarat Government has recently decided to extend financial support to a new promoter to acquire or purchase the sick entity in order to make it viable, though the details of such package would be announced very shortly revealed a top CII official. Utkal Chamber of Commerce president Ramesh Mahapatra said Odisha also needs such interventions as MSME sector is in dire straits here.
Significantly, when MSME Secretary Panchanan Dash recently conceded poor marketing support for units in State as partly responsible for growing sickness, the new IPR, except for announcing some norms for public procurement of MSME products, has not introduced any new initiatives to give a leg-up to MSME marketing scheme. It needs mentioning that as most MSME units invest more in production they were left with little leeway to invest in marketing. On the contrary, States like Gujarat has decided to avail marketing credit to them.
Besides, financial assistance was extended to the MSME units to purchase latest machinery at exhibitions of plant and machinery organised in the State. This type facility would help MSME units in Odisha going for reorientation of their technology and produce cheaper quality products thereby becoming viable in due course.
Interestingly, when new IPR makes a reference to ‘proactive’ mechanism to diagnose incipient sickness in a MSME unit at an earlier stage, the Gujarat Government has very recently decided to lend financial assistance to diagnostic studies that would assess strategies to bring a turnaround of such sick units.