SME DEVELOPMENT PLAN

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SME DEVELOPMENT PLAN
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• PUNJABs ECONOMIC VISION
• CREATING A BETTER QUALITY OF LIFE FOR THE
  CITIZENS OF PUNJAB BY -
• GENERATING GROWTH IN THE ECONOMY TO CREATE
• EMPLOYMENT.
• 2. UPGRADING TECHNOLOGY TO ENHANCE
  PROFITABILITY.
• DIVERSIFICATION FROM AGRICULTURE TOWARDS
• SERVICES INDUSTRY FOR GREATER ECONOMIC
  STABILITY.
• IMPROVING THE INFRASTRUCTURE NECESSARY FOR
  ECONOMIC
• UPLIFT.

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• PROVINCIAL POLICY
• IT HAS BEEN PROVEN THAT THE PUBLIC SECTOR IS
  INEFFICIENT AT DOING BUSINESS THEREFORE BUSINESS
  IS BEST LEFT TO THE PRIVATE SECTOR.
• THE PUBLIC SECTOR SHOULD LIMIT ITS ROLE TO
  CREATING AN ENABLING ENVIRONMENT FOR THE PRIVATE
  SECTOR TO GROW AND PROSPER.
• THE RESULTING ECONOMIC ACTIVITY WILL ACHIEVE THE
  GOVERNMENTS OBJECTIVES OF EMPLOYMENT GENERATION,
  INCREASED INCOMES AND POVERTY ALLEVIATION.

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MISSION PROVIDE PRACTICAL SUPPORT AND
ADVOCATE THE CASE FOR GROWTH OF COMPETITIVE
INDUSTRIES TO ACHIEVE THE FOLLOWING BENEFITS -
a. EMPLOYMENT GENERATION IN INDUSTRIAL,
SERVICES AND AGRO
SECTORS. b. SUSTAINED GROWTH IN
PRIVATE SECTOR PROFITS. c. SUSTAINED
GROWTH IN EXPORT REVENUES. d. SUSTAINED
GROWTH IN GOVERNMENT REVENUES.
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FOR THE PURPOSE OF ANALYSIS, INDUSTRIES
WHICH HAVE SIMILAR PROBLEMS HAVE BEEN GROUPED AS
UNDER - 1. LARGE MEDIUM INDUSTRY
(ANNUAL TURNOVER RS.100.0
MILLION AND ABOVE) 2. SMALL
COTTAGE INDUSTRY (ANNUAL
TURNOVER BELOW RS.100.00 MILLION)
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• SITUATIONAL ANALYSIS LARGE AND MEDIUM INDUSTRY
• Pros
• 1. The Managements are smart knowledgeable.
• 2. Have good access to finances.
• 3. Have carried out BMR and are introducing new
  technologies.
• 4. Are aggressively marketing their products.
• Cons
• 1. Limited role in development of Policy
  Tariff/Tax Regimes.
• 2. Energy being provided is inefficient costly.
• 3. Availability of skilled managers and workers
  poor.
• 4. Infrastructure (Estates Communication) poor.
• Lack of local production of chemicals, dyes and
  accessories adding 10 to costs.
• Modern units are not labour intensive.
• Investment per worker is high. (Rs.300,000/- per
  worker).

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GROWTH OF COMPETITIVE LARGE MEDIUM
INDUSTRY PROVIDE PRACTICAL SUPPORT FOR THE
GROWTH OF LARGE AND MEDIUM INDUSTRY THROUGH
- 1. WELL DEVELOPED AND MODERN INFRASTRUCTURE.
Link page 9 2. HUMAN RESOURCE DEVELOPMENT.
Link page 11 3. EFFICIENT AND
CHEAP SERVICES. Link page 14

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WELL DEVELOPED AND MODERN INFRASTRUCTURE
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HUMAN RESOURCE DEVELOPMENT
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EFFICIENT CHEAP SERVICES
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PROVISION OF SERVICES
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• SMALL COTTAGE INDUSTRY
• Pros
• This sector employs maximum labour.
• Investment cost per worker is low (Rs.30,000/-
  per worker)
• Cons
• Weak management and organization.
• Use second or even third hand machinery.
• Technology employed is old.
• Workers mostly shagirds and not
  educated/trained.
• Almost no access to bank financing.
• Marketing is poor.
• In danger of collapse with the invasion of cheap
  and better products from China India.

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PROMOTE SMALL AND COTTAGE INDUSTRY INDUSTRIAL
GROWTH SMALL INDUSTRY Establish sector
specific Industrial Development Centres for Small
Industry which will - a. Provide latest
technology/practices. b. Provide access to
latest machinery. c. Provide training in new
technologies and machinery. d. Provide credit
(Banks PSIC) for BMR or new ventures. e.
Financing Plan.
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• COTTAGE INDUSTRY
• RURAL ENTREPRISE SUPPORT ORGANISATION (RESO)
• The RESO shall be structured as a Public Limited
  Company owned by the Government of Punjab to
  generate accelerate value added and contemporary
  enterprise in the rural areas. The initial grants
  shall be provided by the Government of the
  Punjab/Donors which shall cover the overhead
  costs of the Organization and a revolving pool of
  funds for credit. Later as on the venture
  succeeds, the Banking Sector is expected to enter
  the market and lend to the cottage industry for
  which RESO shall provide credit guarantees.
• The RESO shall comprise Institution Building,
  Sales and Marketing, Contemporary Design and
  Credit Wings. Their duties shall as under -
• a. Institution Building Wing
• Visit villages and organize the
  Entrepreneurial class of villages into
• Entrepreneur Organizations who shall
  have regular meetings and a
• Capital Building program.

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b. Sales and Marketing Wing
Village entrepreneurs lack the ability to market
their products and are at the mercy
of middle men. RESO shall establish external
linkages and outlets for marketing
and sales of the EO products. c.
Contemporary Design Development (CDD) Wing
Village products are extremely traditional in
concept, colour and design and may not
appeal to the modern mind. The CDD Wing shall
redesign local handicrafts/products
for the modern markets. d. Credit Wing
Village entrepreneurs have no access to
credit and generally obtain raw
materials and capital form middleman. Therefore,
their returns are minimal and
are not a justified return for the hardwork,
skill and effort invested. RESO shall
provide the necessary credit on personal
guarantees/ EO savings to cut out the
middleman and ensure a just return to the
entrepreneur. e. Sustainability
As the Eos mature and their capital grows,
greater responsibilities shall be
transferred to the members. Eventually the
ownership of RESO shall be
transferred to the Eos carrying out operations
based on their accumulated savings
and Bank lending.
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EASY ACCESS TO FINANCES
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• TO SUM UP
• The biggest problem facing the Government is
  employment generation. There is a need to create
  1 million jobs a year to achieve a growth of 7 to
  8 per annum. The Government of Punjab will
  recruit only 25,000 persons in the CFY. The
  remaining jobs have to be generated in the
  services, industry and agriculture sectors.
• An enabling and supportive environment is
  necessary for the private sector to establish
  competitive industries which will generate growth
  and employment.
• The Large Medium Industry can compete but need
  good infrastructure, services, skilled manpower
  and need to be provided a single forum where
  policy and taxation proposals can be decided.
• The Small Cottage Industry, which is 60 of the
  Industry is un- prepared for the forthcoming
  challenges and needs hand holding support from
  the Government to improve their technology
  levels, skills, marketing and access to finances.
• In order to support the Industrial Sector a
  number of proposals are suggested for the MTBFR.

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PROVINCIAL MEDIUM TERM BUDGETARY PROPOSALS
PROMOTING SUPERIOR TECHNOLOGIES
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INDUSTRIAL EFFICIENCY
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ESTABLISHMENT OF POLY TECHNICS RESPONSIVE TO
INDUSTRIAL NEEDS
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EXPAND VOCATIONAL TRAINING INSTITUTES (VTIs)
FROM 70 TO 500 VTIs
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SUPPORTING GROWTH OF COMPETITIVE SMEs
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INDUSTRIAL DEVELOPMENT CENTRES (IDCs)
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RURAL ENTREPRISE SUPPORT ORGANIZATION (RESO)
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THANK YOU