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Taking the economy to the path of growth
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Bikky Khosla | 21 Jul, 2009
Although the economy has shown signs of recovery, several factors that threaten to restrain the growth of Indian manufacturing sector still persist. Amongst the several detrimental factors two - high interest cost and fall in exports - have turned out to be hurdles in India's growth story.
Today, credit is available at a steep rate which is making manufacturers totally uncompetitive. Banks are reluctant to lend to SMEs that are into manufacturing owing to the fact that many of them had incurred losses in the last fiscal and banks are insisting on credit ratings for these borrowers. Additionally, banks are also asking for a higher value of collateral security than the sanctioned limit. Thus borrowing for SMEs is still a distant dream.
Now if we look at our exports, with demand from our conventional markets of US and Europe dwindling, exports have taken a beating. In a recent survey, an industry body says that "...5 out of 10 manufacturing sectors are expected to witness a fall in their export level in July-September 2009 vis-Ã -vis the same quarter last year." For instance, the textile sector production is likely to be lower than last year's. This means more job losses are likely.
Meanwhile I think it is an alarming situation that the share of manufactured goods exports declined from 81 percent in 1999-2000 to 63 percent in 2008-09. The government has to come out with some concrete steps to take the manufacturing and the export sectors' growth to a higher trajectory.
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Exim Bank should play its role
S. N'CHO | Thu Jul 23 10:59:55 2009
I am an African from the west African region. I am particularly interested in India from which I think Africa could learn a lot. I think that Exim bank India should redesign aspects of its mission and support ventures between Indian and African private companies. Not only ventures that can boost Indian exports but also those that could give Indian firms and particularly SMEs additional funds to boost their domestic operations; in fact in many instances, companies investing in Africa are free to rapatriate their earnings.
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Re: Exim Bank should play its role
Rajeev Narayan | Wed Jul 29 03:26:30 2009
Hi, If you are interested in exploring some business opportunities from India or China, please write me at beauticreation@gmail.com
Thanks,
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Re: Exim Bank should play its role
Vinay Joshi | Wed Jul 29 22:33:50 2009
Hello, how are you? Exim Bank doesn't fund domestic entitities. Exception being overseas JV's.
The banks worldwide finance as per international norms taking into consideration the country specific rating & eligibility / creditworthiness of borrowers. It doesn't discriminate, it's only criteria is feasibility / viability of the project / venture. For more details please contact Indian Mission in your country, they will always resolve your query to the best of your satisfaction.
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Taking the economy on the path of growth: yr,editorial
shrinivas k moghe | Wed Jul 22 12:10:14 2009
Very rightly said,but whats the use? SMEs are helpless,when it comes to securing credit from the Banks. Prospects are meaningless,when there is insufficient fund at your disposal. I feel that Banks should encourage funding to the known,well-run,SMEs,rather than squandering their money on unknown,unproved clients. And our Govt.should come out with a suitable policy to this effect. Moreover,Banks should be soft towards their existing and old clients,when it comes to securing colateral security. Inshort,Banks must have a pragmatic method of assessing credibility of the SMEs.
From: Shrinivas Moghe
Thursday Chemicals
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Re: Taking the economy on the path of growth: yr,editorial
Suresh Doraiswamy | Wed Jul 29 05:13:30 2009
I would like to add to what you said. I have noticed that the PSU banks lack in the area of customer liaison because the officers get transferred far too often. No continuity with the customer. Usually the new officer will refute any commitments made to the customer by the previous officer and the customer has to undergo heartburn and stress to get continuity of working capital and other cash flow objects. This is a Terrible Malady in our Banking System.
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Re: Taking the economy on the path of growth: yr,editorial
Vinay Joshi | Wed Jul 29 23:43:24 2009
Dear Mr.Shrinivas Moghe,
It seems Mr.Bikky Khosla has missed certain points & you are not updated with information on MSME funding. The govt. in it’s endeavour to promote this sector, which contributes 40% of manufactured output apart from services, has promulgated various schemes / guidelines. This fiscal year budget presented envisages a special fund of Rs 4,000 crores to support MSME to incentivise lending institutions by refinancing incremental lending to them. This apart from stimulus package announced in last 10 months. Over & above, two years back Credit Guarantee Trust Fund for MSME was established by SIDBI & C.Govt. for loans without collateral, insured upto Rs 18.75L. All Nationalised Banks & participating DFI’s [MLI’s]in the consortium are supposed to boost the MSME segment. Such loans will be at 3% above PLR. MSME’s who have little to secure by way of mortgage / hypothecation are real beneficiaries. It essentially covers the lending risk.For more detail information please contact any branch of nationalised bank or SIDBI.
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