Shillong, Sept 26: Over 25 percent or 74,000 of Micro, Small and Medium Enterprises (MSME) in the northeast are “struggling to survive”, according to a study.

In a study on “Revival and Development of MSMEs in the NER for Inclusive Growth”, it was found that around 74,000 MSMEs in the region are operating far below their potential.

A large number of these MSMEs are facing a crisis primarily due to lack of timely availability of affordable finance, fast changing technology and inadequate infrastructure, the study conducted by MSME Export Promotion Council (EPC) found.

The study has also emphasized the need for designing a new architecture of development financing, revolving around three critical players: MDoNER, multilateral and bilateral institutions and private players.

Realising the study MSME EPC Chairman, D S Rawat said, many start-ups have come up and helped the region in providing jobs, but some of them are in deep crisis in the absence of hand holding either large units or institutions.

In order to improve industry attractiveness, there is an urgent need for an environment that fosters entrepreneurship and drives the economy towards growth and sustainability.

In this connection, Rawat says, ‘Single Window’ system can easily be implemented at a low cost which will help the MSMEs in the state and attract private investment.

The major challenges identified by the study are geographical, inaccessible hilly terrain, underdeveloped transport, low participation of private sector, poor financial and infrastructure facilities such as roads, railways, health, educational institutions, and technology.

Moreover, the MSME clusters are inadequately equipped especially in tool rooms, innovation centres and testing facilities. Therefore, the possibility of collaboration can be explored with companies having innovative infrastructure, R&D institutions, and universities that specialize in specific industry or knowledge areas.

In terms of funding, private sector contributions should be encouraged through debt instruments like bonds, CDs, with tax incentives through SIDBI.

MSME EPC has therefore come up with a 5-point strategy to revive these struggling MSMEs. These include setting up high powered committees by state governments to resolve the problems faced by MSMEs, and drawing up road maps to create a conducive environment for tapping the untapped potential.

Focus on skilling the manpower, opening show-rooms at different locations for the products produced by the MSMEs, and developing a mechanism to connect the units with research & development centres and global marketing agencies, are some of the strategies.

The government should also build networks of development service providers that can extend customized solutions to the MSMEs in the areas of technology, product development and marketing techniques, Rawat said.

Also Read: Conrad leaves decision on ‘cow protection rally’ in Shillong to district administration

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