MSMEs too small to Manufacture Quality products

Ram Mohan Mishra, Interaction on Non Performing Industry

December21, 2017 (C) Ravinder Singh progressindia2015@gmail.com

MSMEs generally provide Small Components or Services to Large Industries. Indian MSMEs are too small to Manufacture Quality products and though SMEs can DEVELOP Innovative Products but are Denied Patents, FUNDS – Patent Office is Crippled.

Ram Mohan Mishra, IAS is first Government Officer I met in 42 years quickly learns from interactions with public with great deal of honesty.  \

At the end of the interaction one of the panelist stated that all theFinances for 2018 budgets are finalized and MSME are to get benefits only in Budget 2019.

ü Policy Matters can be IMPLEMENTED without delay benefits realized immediately.

Problems of MSMEs are generally believed to be 90% have no access to Bank Credit, Outdated Technology, Poor Quality, Payment Delays, Uncertain Market, Cheap Foreign Imports, High Production Cost etc. But their biggest problems are –

1.   Banks have Zero Skills to Serve Industry,

2.   All Kinds of Malpractices by Large Corporate,

3.   Zero IPR.

 

APPLE or KFC Operate Globally had progressed only due to Patents & Trademarks. When KFC progressed to $23b Worldwide Sale – Pooran Singh Ka Dhabha has 50 Fake Pooran Singh ka Dhaba around it.

While working in BST in 1974 as 19 Yrs old engineer I noticed based on Newspaper report the Steel Tube factory was operating at 15% Load Factor and after study I offered to Improve Technical issues – but on getting my letter Corporate Office without delay sent a Mercedes on Sunday – I was told to resign in exchange for Good Experience Certificate. Gradually I realized that –

Ø Company was Under Reporting Production by 75%, yet declaring Huge Profits,

Ø Banks didn’t restrict ‘Working Capital’ to 15%,

Ø BST set up another unit in Kerala, when main factory operated at 15%,

Ø Banks created at least 10-15 Times over capacity – mostly imported plants.

Ø Companies didn’t ENGAGE Toppers but MEDIOCRE,

Ø Companies didn’t Invest in R&D but Engaged in Chartered Accountants.

Ø 1975 reputed companies Supplied Goods Against Payment by Bank Draft, still banks continued to give Working Capital @ 20% of Turnover.

Malpractices by Large Corporate Since 1975

Ø A Medium Qualified Family operate 104 Companies & Subsidiaries which normally required 104 CEOs, 104 CFOs and 104 CTO.

Ø Even for BASIC Infrastructure Projects Average Qualifiedfamilies get over 50% Equity and 100% Bank Finance.

Ø Even when for decades Corporate give less 1% Dividend to Turnover but Banks don’t penalize them with Commercial Rate of Interest or stop further advance.

Ø TRANSFER $b between Unrelated Companies than Each Company reporting Operating and Operating Independently.

Ø Promote UNVIABLE PROJECT – RJio acquired 4G License in 2010 till date has only 13 mobile customers, Didn’t raise money through IPO.

Ø When TATA acquired JLR and CORUS unrelated group companies funded the foreign acquisition.

Ø Tata Companies were getting WORKING CAPITAL, Yet Delayed Payments to MSME by over 6 months.

Ø Multiple FINANCING OF Housing Projects,

Ø A 1000 MW Power Project will get 100% Bank Finance – Another Company taking over to get Bank Funding to acquire it.

Farmers are not Getting LONG TERM CREDIT for their ancestral profession even against mortgage of land – They have Land, Power Connection, Produce Raw Material or have all the Raw Material within Village or 2-3 kilometer radius – can easily setup Storages, Primary Processing Units Like Rice Shellars or Atta Chakki. When plant and machinery like Rice Shellar or Flour Mill cost say Rs.5 Lakh – GoI promotes FOOD PARKS that need say Rs.500 Cr Capital Investment.

MSMEs Have No Roots in India literally.

Ravinder Singh, Inventor & Consultant, INNOVATIVE TECHNOLOGIES AND PROJECTS

Y-77, Hauz Khas, ND -110016, India. Ph: 091- 8826415770, 9871056471, 9650421857

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