Industry & Economy
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Economy
Small, medium units bullish on economic growth: Survey
Our Bureau
Mumbai
June 21
Small and Medium Enterprises (SMEs) in India are optimistic about the economic growth in the country. Around 79 per cent of SMEs are expecting economic growth to accelerate in India, says an HSBC Asia-Pacific Small Business Confidence Survey.
India emerged as the most optimistic country in the survey, which was conducted in nine countries in the Asia Pacific and included Hong Kong, Singapore, Taiwan, Korea, Malaysia, Australia, Indonesia and China. Around 1,800 SMEs were surveyed in the first quarter of 2007. The SMEs surveyed in India had an annual sales turnover of less than $11 million. Notably, while 36 per cent of the SMEs in India said they would make more investments in their business this year, 64 per cent said that they had no such plans.
Mr Puneet Chaddha, Head, Commercial Banking, India HSBC, said: "SME investments were mainly for increasing capacity or hiring new talent. What is significant is that SMEs are not cutting down their production."
He added that this did not imply that there would be a slowdown in credit demand as SMEs mainly require loans for their working capital needs.
HSBC is trying to facilitate small initial public offerings among SMEs, Mr Chaddha said. Venture capital transactions with SMEs have also been successful. Mr Chaddha expects SMEs in India to sustain a growth rate of 25-30 per cent this year. "The SME sector accounts for 50 per cent of the exports and is the second largest employment provider, next to agriculture," Mr Chaddha said.
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