The Hindu Business Line : ‘Cluster approach necessary for SMEs development’

Chennai, April 23 Cluster approach is the only hope for the development of small and medium enterprises (SMEs) to enable them face global competition, according to the Chairman of National Manufacturing Competitive Council (NMCC), Dr V. Krishnamurthy. Delivering the keynote address at the first Cluster Summit here, organised by the Confederation of Indian Industry (CII) in association with the Automotive Components Manufacturers Association, ACMA Centre for Technology, National Institute for Quality & Reliability, Maruti Centre for Excellence and United Nations Industrial Development Organisation, he said NMCC is giving importance to cluster development, especially in the high priority areas of leather and footwear, textile and garments, auto components and electronics.

Manufacturing capability

According to him, the manufacturing sector should contribute to 35-40 per cent of wealth creation, considering the nature of India’s demography and resource availability. However, the current growth rate of 6 per cent is inadequate and, therefore, steps should be taken to improve the manufacturing capability to correct the distortion between the contributions of agriculture, manufacturing and services sector.

He emphasised the importance of reaching out to the vast number of SMEs to upgrade their technology through cluster approach. But there were only 14 councillors for cluster programmes in the country and a ten-fold increase in the number was needed, he said.

The value of imports from China has grown to Rs 1,25,000 crore now from about Rs 9,000 crore four years ago. About 75 per cent of the imports are manufactured goods that are being manufactured in India by SMEs. Unless the local industry enhances its competitiveness the industry will be flooded with imported products, in the wake of FTAs being signed between nations, he said. The Chairman of CII Cluster Summit Steering Committee, Mr C. Narasimhan, said it was necessary to evolve Indian Competing Production System involving the ethos of the traditional learning culture of Gurukul.

Manufacturing policy

The manufacturing policy will be submitted to the Prime Minister in couple of months, Dr Krishnamurthy said.

Speaking to the media on the sidelines of the first Cluster Summit, he said the policy will enable manufacturing sector to compete and grow in the global arena.

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