Bengal plans clusters to give SMEs competitive edge

The 20 hubs include rice mills, wood-carving and honey-making units.

The West Bengal government plans to develop 20 clusters in order to provide marketing competitiveness to micro, small and medium enterprises (SMEs).

While a cluster for manufacturing fans will be set up in Kolkata, a shuttle cork and metal spare parts making unit will be opened in Howrah.

Besides, a brass, base metal, gold and silver works unit will be established in Nadia, a cluster for plastic products will be developed in Murshidabad and a honey producing unit in Malda.

Other small scale industrial hubs will be set up at South 24-Parganas (filigree and zari work), North 24-Parganas (silver ornaments), Bankura (roof tiles), Burdwan (wood carving and rice mills), Hooghly (jute products), and Coochbehar (sheetalpati).

"We are working on identifying more locations for developing clusters, and proposals for these will be sent to the Union government soon. Right now we are waiting for the Centre's nod for the clusters that have already been identified. The approval is expected sometime this month," said Ariz Aftab, state director and special secretary for micro and small scale enterprises department.

The Centre gave Rs 60 lakh to the state for conducting a diagnostic study on the SME cluster, a report on this was submitted by the state in May this year, Aftab said.

According to small and medium enterprises' associations in West Bengal, there has been a significant increase in the contribution of small enterprises to the country's economic growth as well as in the area of employment generation.

While efforts are being made by the central and state governments, financial institutions and banks to promote the SME sector, the pace of credit flow is slow.

According to micro and small-scale units in the state, cold-shoulder attitude by banks and financial institutions is a major hindrance to their development.

Manabendra Mukherjee, state minister for micro and small enterprises, said that banks did not want to extend credit to SMEs, and it was due to the state government's pressure that a total credit of Rs 1,593 crore was sanctioned in 2006-07.

"The figure is just 65 per cent of the target given to banks by the state. For 2007-08, the target is Rs 3,000 crore," he added.

While net bank credit (NBC) grew by 17.33 per cent in 2000-01, SSI credit grew by only 5.43 per cent that year. In 2002-03, NBC grew by 25.04 per cent whereas SSI credit recorded a negative growth rate of 3.6 per cent. In 2005-06, while NBC grew by 39.38 per cent, SSI credit grew by 8.5 per cent only.

According to KS Singhwan, chief general manager, Small Industrial Development Bank of India (Sidbi), only 14.2 per cent of the registered small scale industries have access to bank credit. The problem of not extending credit to these units was due to the unavailability of proper documents, he added.

Singhwan said all statistics available with the government were related to small-scale industries. "The Centre is yet to compile a data on micro and medium enterprises though it passed the MSMED Act in 2006. According to government estimates, around 124 lakh units in India come under the MSME category," he added.