The Hindu Business Line : `Incentives, protection not enough for SMEs'

It is no longer necessary to think in "terms of the small-scale sector versus the large-scale sector", he said at the inaugural session of a conference on `Small and medium enterprises and livelihoods: Towards an agenda for the Eleventh Five Year Plan' in the city on Monday.

He pointed out that large industries could, in fact, seed and nurture several small-scale units. The growth of the small-scale sector should aid the growth of the large-scale sector and vice versa, he added.

More efficiency

Incentives and protection alone will not help the small-scale sector flourish, he said. While incentives do work, they may not work as expected. Instead, small and medium enterprises (SMEs) must be quick to respond to change, have low costs and produce efficiently, if they are to have a foundation for success, he added.

Agreeing that Kerala has not been a business-friendly destination in the past, Mr Balakrishnan pointed out that the State's new industrial policy recognises the role of the private sector in contributing to growth. Kerala's new industrial policy has identified industry and trade as the twin engines of growth, he added.

In this inaugural address, Dr M.K. Ramachandran Nair, Vice-Chancellor of the University of Kerala agreed that incentives for SMEs may not have worked as expected.

Jointly organised by the Kochi-based Institute of Small Enterprises and Development, the Planning Commission and the International Network on SMEs in Local Economic Development-India, the two-day conference is expected to help highlight the key economic role played by SMEs and incorporate this understanding into the Eleventh Five Year Plan.