Effective Central government schemes, simpler tax laws, technological up-gradation and flexible labour laws are some of the key requirements of small and medium enterprises (SMEs) for growth and survival, a survey by the PHD Chamber of Commerce and Industry has found.
The survey – which covered SMEs located in Uttar Pradesh, Haryana, Punjab, Rajasthan, Madhya Pradesh, Himachal Pradesh, J&K, Uttarakhand, Chhattisgarh, Chandigarh and Delhi – found that high tax rates, local regulations, rigid labour laws, deficiencies in finance, technology and marketing hamper the growth of SMEs by raising the transaction costs of business.
Respondents cited adequacy of credit and finance, followed by technology up-gradation and skill development, marketing support, and research and development as four most important factors instrumental in developing the competitive advantage of small firms. Other concerns cited were the prevalence of the ‘inspector raj’, problems relating to cost, lack of business and policy-related information, deficient technology, non-adherence to quality norms, rigid labour laws and corruption.
A large majority of respondents recommended that the excise duty limit should be raised from the current level to help SMEs offset the rise in raw material prices, cost of services and interest rates. Around 50 per cent felt cheap imports were eroding the competitive advantage of indigenous products.
