A study by the Associated Chambers of Commerce and Industry of India (Assocham) on Tuesday claimed that Gujarat was among the states that created less jobs in the small and medium enterprises (SME) sector in the last one year.
Gujarat ranked 14th in the country by the industry body much behind other big states in terms of employment generation in SME sector. The state-wise analysis was done based on the figures for the period of April 2011 to February 2012.
According to the Assocham study, only 8,058 jobs were created in the SME sector of Gujarat. The top state with highest number of employment created in the given period was West Bengal with over 43,000 jobs.
The other states ahead of Gujarat include, Andhara Pradesh, Uttar Pradesh, Tamil Nadu, Odisha, Assam, Karnataka, Bihar, Rajasthan, Madhya Pradesh, Kerala, Jammu and Kashmir, Maharashtra.
The analysis and ranking is based on factors such as number of SMEs assisted, utilisation of margin money and estimated employment generation during the period under consideration.
"Over 325,000 jobs were generated in the SME sector by providing assistance to a total of 35,607 SME units across India utilizing margin money subsidy worth about Rs 700 crore during the 11 months period between April 2011 and February 15, 2012,” said D S Rawat, national secretary general of Assocham.
"Besides, the sector is estimated to employ about 59 million persons in over 26 million units which produce over 6,000 products ranging from traditional to high tech items," he added.
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Talking about Gujarat, chairperson, Assocham - Gujarat Council, Bhagyesh Soneji, said, ""Due to steep and steady rise in raw material prices, interest rates and transaction costs, the SME units in Gujarat are reeling under huge pressure. Profit margins are shrinking and various units are reluctant to expand their operations."
"The SME sector deserves special attention in terms of simplification of functional operation, procurement of raw materials, efficient banking and marketing facilities, easy availability of funding at concessional rates, liberalising regime and special incentive for export-oriented units," Soneji explained.
During the said period, the Gujarat government had assisted about 1,494 SMEs through margin money subsidy worth over Rs 52 crore, the study stated.
Based on the analysis, the Assocham has proposed to collaborate with Gujarat government to promote skill development through workshops at MSME hubs to increase the employability of the workers and heighten the growth prospects of SMEs in Gujarat. It has also raised concerns about the poor state of employment SME in Gujarat and urged the state government to give special attention to the sector.
As per the estimates under Assocham vision document for Gujarat, over 400,000 SMEs are operational in the state, which account for estimated investments of over Rs 30,000 crore and an annual production of about Rs 35,000 crore. Ahmedabad is the leading district housing all SME industry clusters followed by Rajkot and Surat.