A downward trend in job creation in a deteriorating economic condition, particularly in the small and medium enterprise (SME) sector, has emerged in the last one year in Gujarat according to a study by ASSOCHAM.

Considering that a meagre 8,058 jobs were generated in the SME sector between April 2011 and February 15, 2012, ASSOCHAM on Tuesday urged the Gujarat Government to further strengthen and widen the base of the sector in the State.

The State Government assisted 1,494 SMEs utilizing a margin money subsidy worth over Rs 52 crore and ranked 14th amid leading states in a state-wise analysis of number of SMEs assisted, margin money utilised and estimated employment generation during the aforesaid period, carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Due to steep rise in raw material prices, interest rates and soaring transaction costs the MSME sector in the state is reeling under huge pressure as the profit margins are shrinking and various micro, small and medium industrial units in the state are reluctant to expand their operations,” said Ms Bhagyesh Soneji, Chairperson, ASSOCHAM Gujarat Council.

“Over 3.25 lakh jobs were generated in the SME sector by providing assistance to a total of 35,607 SME units across India utilising margin money subsidy worth about Rs 700 crore during the said 11 months,” said Mr D.S. Rawat, Secretary-General of ASSOCHAM.

West Bengal, which utilised Rs 52.5 crore worth of margin money in 5,290 SME units, generating 43,000 jobs, emerged as a front-runner to facilitate growth in the SME sector. Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Odisha, Assam, Karnataka, Bihar, Rajasthan, Madhya Pradesh, Kerala, Jammu and Kashmir, Maharashtra remained ahead of Gujarat in creating jobs in the SME sector.

“The SME sector accounts for about 45 per cent of India’s manufacturing output and 40 per cent of the total exports of the country,” said Mr Rawat. “Besides, the sector is estimated to employ about 5.9 crore persons in over 2.6 crore units which produce over 6,000 products ranging from traditional to high-techs items.”

Moreover, SMEs account for total investments worth over Rs 30,000 crore and an annual production worth about Rs 35,000 crore.

More than four lakh SMEs are currently operating in Gujarat with majority in the areas of textile (21.4%), metal products (31.9%), chemical products (7.6%) and beverages and tobacco products (7.5%), an ASSOCHAM vision document of Gujarat said.

In Gujarat, Ahmedabad is the leading district housing SME industry clusters, followed by Rajkot and Surat.

(This article was published on July 24, 2012)
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