Policy

Small industries seek confidence-building measures from new Kerala Government

V.Sajeev Kumar Kochi | Updated on July 01, 2021

Demands revival of State’s economy reeling under the strain of the pandemic

The Institute of Small Enterprises Development (ISED) has called for confidence-building strategies for industry from the new government in Kerala at a time when the State’s economy is reeling under the strains of Covid pandemic.

Reviving entrepreneurial confidence needs to be the top priority for the new government, says an ISED Policy Brief- ‘Limits to Enterprise and Entrepreneurship under a Pandemic: The Kerala Scene” brought out by the ISED Small Enterprise Observatory.’

Enterprise Security is a problem that demands an integrated revival package involving components such as real services, innovative financial products, policy directives, and advocacy with the Union Government for reforms in some of the existing Central schemes, P.M.Mathew, ISED Chief, and author of the document said.

Distributional consequences

The pandemic, according to him, has brought serious distributional consequences, between those having social protection (the salaried), and the others. The self-employed, with the limited scope of the market for their products, and uncertain incomes, are the worst affected. While the ‘new normal’ is stretching out, many of the old jobs have disappeared; new products and services have replaced old ones; consumption patterns have drastically changed. All these involve adverse consequences on income opportunities of the ‘job creators’ in general, and more specifically the petty producers at the “bottom of the pyramid”.

In a State where, as high as 71.4 per cent of the budget gets allocated for salaries and pensions, this widening gap is a matter of immediate policy concern. The first priority of the new Government and the State Planning Board must be to make a scientific assessment of the situation, Mathew said.

Quoting estimates, he said the survival rate of registered MSMEs in Kerala is 10 per cent. Even this survival rate might have seriously eroded during the last two years. This is a matter of serious concern from the angle of sustainability of small businesses and entrepreneurship, and for provision of ‘decent jobs’ to the ever-increasing number of unemployed.

Two-pronged strategy

The ISED document underscores a two-pronged strategy such as the need to expedite the ongoing industrial infrastructure projects like corridors and industrial parks and a campaign mode intervention for rejuvenation.

There is a need for a ‘Decentralised Smart Entrepreneurship’ strategy, a match-making exercise in MSME rejuvenation, and meeting the aspirations of the technology start-up, Mathew added.

Published on May 20, 2021

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