Interaction by B Swaminathan

Vadodara being the third largest city in Gujarat has over 18,000 small scale industries operating in the district. The city is spread over an area of 7,794 sq kms, and is the administrative headquarters of Vadodara. Primary industrial clusters in Vadodara include chemicals & fertilizers, pharmaceuticals, biotechnology, cotton textiles, machine tools, glass, engineering, tobacco, fisheries and dairy. The district has many reputed organizations engaged in production of a variety of goods like textile, chemicals, rubber and its products, food products, metal works, equipments, leather & leather products, tobacco, ceramics and cement are to name a few.

Some factors like a conducive business environment with ample growth opportunities, better connectivity through rail and road make the area easily approachable and infrastructure facilities. The industrial clusters in Vadodra export products to regions like Africa, Middle East and Europe.  However, there are some of the immediate concerns of the members which are to be addressed immediately by the state and central governments.

We did a round-table discussion with the office bearers of VCCI, and here are the seven expectations that they have from the state and central governments:

  1. SMEs in Vadodara do not want any subsidy. Instead, they want good local infrasturcture and policies that will help business-owners work enthusiastically. Many feel that the roads in the industrial corridors are not enough to transport the materials.
  2. The state government should enhance the single-window-clearance systems, which is not working at its 100% . There are technical glitches and bearuecracy-related issues that stop it.
  3. The current tax procedures in GST are not SME-friendly. Internally, we need to have additional money to pay taxes which is tough with the current payment cycles, and also the GST rate of job-works in the engineering sector is 18%, which needs to be addressed immediately.
  4. Even today, many business owners from Vadodara are not academically educated. Thus, many of the schemes and policies are framed in such a way that a trader cannot understand. The government should create policies in a way that it is easily understandable even by the uneducated.
  5. In many cases, slabs for sanctioning of loans till repayment are not measured in the right way. In most cases, a large corporate and small business owner come under the same slab. Even though the government has brought changes in the NPA, it is yet to reach many of the small entrepreneurs.
  6. The penalties on GST should be removed, at least for companies with a turnover of less than INR 2 Crores.
  7. The GIDC (Gujarat Industrial Development Corporation) should start organizing loan melas as the banks are reluctant to provide loans to SMEs. With GST demanding 18% of our business value and holding it for 3 months, banks should come forward to provide loans. Even if ther is a rejection rate, the reason should be mentioned properly and at the earliest so that SMEs can approach alternative sources.