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The SMEs in the Indian industry were hoping for the economic situation to improve following the beginning of the current financial year 2009-10. However, they will have to wait a while longer. A market recovery seems far from sight as the recessionary winds sweeping across the US and Europe are showing no signs of abating. In fact, going by the forecasts, prospects for this financial year seem bleak.
The worst is yet to come
With government statistics indicating no turnaround for most industries reeling under the global meltdown, as many as 5 lakh SMEs in India across diverse verticals are likely to face closure in 2009-10. This number is anticipated to rise further in the first two quarters of this financial year if there is no improvement on the global economic front.
Industry experts believe that demand and credit crunch could lead to lockouts of several Indian SMEs, thereby posing a threat to the survival of millions of people employed in these units. Presently, though the downward slide of the economy has continued, the negative growth curve is not as steep as many had projected.
However, experts fear that the global economy is only a few months away from hitting rock bottom and once that happens troubles for the Indian economy will amplify further. The World Bank is expecting the global economy to shrink by 1.7% in the later half of 2009.
SMEs bracing for grim 2009-10
Given the market forecasts, Indian SME entrepreneurs are gearing up for a bleak 2009-10. Mukesh Toshniwal, Proprietor, Toshniwal Enterprises Controls, says, 'We have begun taking preventive measures to shield our firm from the adverse cost cutting, and this is our top priority.'
While some entrepreneurs in the SME segment are taking the innovative route to beat recession blues, others are deploying integrated business solutions to leverage their areas of expertise.
As Nitin Maheswari, Proprietor, Ambika Synthetic Mills, says, 'Given the forecasts of a bleak economic outlook, we are looking at ways that will help us increase our operational efficiency and productivity. This would not only reduce our overall cost but also provide us with a competitive edge in the international market.'
With the ongoing economic crisis likely to persist in the current financial year, business units across the country are counting on fiscal incentives from the government to help them sustain their business.
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About the Author:
David Parks is a well known author and has written articles on B2b Yellow Pages, B2B Portal, Measurement Calculator, suppliers, Manufactures and many other subjects.
