U.K Sinha, the SEBI chairman, says that SEBI has taken steps to list regional companies on BSE and NSE platforms too. Its aim is to make private equity and venture capital available to the SME sector. SEBI also intends to bring liquidity in secondary market.

The BSE SME exchange serves a separate platform for the growth of SME sector. This is apart from the role that Private equity and Venture capitalists play in growth of SME sector.

The first company to be listed on small and medium enterprises (SMEs) exchange platform is BCB Finance. The company is operational and many more similar companies are queued up for being listed in future too.

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These low income states cannot attract private investments and are ignored for perception issues. Till date there has been not a single fund for these states. The Pragati India Fund is meant to focus on these States. This fund launched last year can make investments in the range of $5-10 million with stakes ranging between 25 and 35 percent.

Through the Pragati Fund, IFC is looking for at-least 10-15 investments in smaller enterprises. It is not easy for IFC to directly make investments in SMEs and so it seeks opportunities like Pragati.

IFC the largest global development institution for private sector also made commitments to other similar SME funds like that of Ambit Pragma Fund II, Zephyr Peacock India Fund III and Forum Synergies (India) PE Fund. This year IFC has plans to invest $100 million in seven other funds in India. The Indian SME receives only 5% of Private Equity capital as major chunk of capital infusion happens in metros and tier-1 cities. IFC is also engaged in a process of raising $1 billion as private equity global infrastructure fund. Out of this, 15 to 20 percent of funds may find its way to India.

The way of functioning of businesses has changed today as the Indian economy is writing a new growth story. Mr. Kumar says that it is important that SMEs understand the growth prospects and start adopting IT solutions. Mr. Kumar while attending a seminar titled ‘Information, Communication & Technology for Enhancing Competitiveness of Indian SMEs’ spoke about SMEs and IT solutions.

In the seminar, Mr. Kumar disclosed that the Government is going to make available high quality broadband access through ‘National Optical Fibre’ network in village Panchayats by the year 2014. Semiconductor wafer fabrication is easy to carry with no transportation charges. The project is under process and is going to be very beneficial for all.

For the sake of skill development in IT sector, the Government is going to train 10 million people in the country in coming days as part of ‘National Skill Development Programme’.

When the bank management starts to monitor the loan applications then obviously more SMEs will find loans. The banking sector is not doing much for the SMEs now. Not just this, even the venture capitalists are not doing enough to boost the SME sector. Many SMEs as of now do not have expertise in financial management. They need consultancy services to manage their financial condition.

Chakrabarty said that banks should maintain transparency in interest rates and should keep disclosing the interest rate that they are charging. Top banking officials, however, say that bank officials are compassionate and are willing to grant loans to business enterprises.

FDI in retail can be a good initiative to mobilize the Indian economy and also benefit the supply chain infrastructure as a whole. Extinction of the Kirana stores and several Small and Medium Sized Enterprises (SMEs) have been cause of deep concern for the government. It is being anticipated that retail giants in long run can abuse SMEs for they will become stronger and hold dominant positions.

With the advent of big foreign retail stores in cities, Kirana stores will face increased competition. But this does not necessarily mean that small businesses would also be wiped off from cities. After-all, big retails depend on them for raw materials and finished products. You can’t expect a big retail giant like ‘Walmart’ to gain the same margin advantage from a big supplier like ‘Colgate’. It has to depend on SMEs to keep profitability intact.

Again there is the concern that big retailers that often play on volumes can approach large suppliers. Also big retailers have a tendency of having large credit cycle that means they pay to suppliers slowly. This is not congenial to SMEs as their cost of borrowing is much higher.

Keeping these factors into consideration, the Government has made it mandatory for big retailers to source 30% of goods from SMEs in India. But then the asset limit of small enterprises set by government is 50 m, which means many big suppliers will get listed. This is why the concern of SMEs is not being addressed. Small industry experts feel that they should have been consulted for better framing of laws.

Emphasis is laid on the challenges for substantial growth of SMEs. Lakhsman Guguluthu, CEO, BSE-SME who recently attended a session organized by CII Eastern Region laid stress on SME growth that currently contribute to 8 percent of the country’s GDP.

SMEs are found to make contribution of up to 45 percent in India’s manufactured output and 40 percent in exports. But for this purpose they need investment. Small investors need to be attracted but then informed investors who are willing to make medium or long term investments should be preferred more for SME growth.

SEBI has approved setting up of an SME exchange. Already 4000 companies are listed that can qualify for SME exchange. Out of the 4000 companies, there are 1,500 firms having paid-up capital of less than Rs 10 crore and 2,500 companies have Rs 10-25 crore as paid-up capital.

This SME segment pact has been inked by Dr. HP Kumar, CMD of National Small Industries Corporation (NSIC). Mr. Meskelchalla DG, Federal Micro and Small Enterprises Development Agency (FeMSEDA), Ethiopia is among the other members who helped in drafting the agreement. The drafting of the agreement is being done in the presence of Dr. Manmohan Singh and Meles Zenawi, prime minister of Ethopia.

India intends to foster cooperation with Ethiopia in a number of areas that include science &technology, education, research on agriculture and information technology.

Input cost of SMEs will definitely increase and shall have an adverse impact on Indian exports of drug formulations. Total Pharma exports done by SMEs are Rs 20,000 crore. All over the country, the number of SMEs in the Pharma industry is around 6,000.

Director General of Foreign Trade (DGFT) has passed an order that makes bar coding essential for exports. If this is not the case, Pharma industry SMEs shall be wiped out from formulations business. Jagdeep Singh, Secretary General of SPIC (SME Pharma Industries Confederation) says, “We are already facing tough competition from China, and with the guidelines in place, we fear that our exports will decline, as it will make products costlier.” Singh says that the bar coding order should be withdrawn.

Each SME’s registration cost is around Rs 2000 and then there are other recurring expenses of at-least Rs 1 lakh per month. Machine installation may also require at-least Rs1 crore for a packaging line. This is going to surge on the input cost and if this continues, eventually export market shall get transferred on to China and multinationals. This is definitely going to bring the downfall of Indian SME exporters.

N R Munjal, Indian Drug Manufacturers’ Association President says that there is no need to implement bar coding for the spurious drugs found in retail pharmacies is meager only 0.003 per cent. This step is going to help out small Pharma units.

IDMA recommended that soft loans should be given out to SMEs. IDMA is pharmacy companies’ oldest association. It has got 800 members that consist of small, medium and large companies.

The company has witnessed exponential growth in India during past years. Souma Das, Infor’s vice president, says, “We are expanding our footprint in India by moving from mid-market to large enterprises.”

To increase the inflow of large enterprise customers and to further expand the Infor’s overall business in India, Das wants the growth momentum to continue. This is possible only if the economy remains stable.

Infor has partnered with local and global system integrators (SIs). This has helped it to scale its reach to customers of large enterprise.  The R&D wing of the company at Hyderabad is working to customize solutions according to the Indian laws, compliance and tax regulatory norms.

The company has seen growth globally with 17 percent growth recorded in third quarter and the addition of more 2000 customers. Infor has entered into Indian market in 2006, but its product Baan or Baan ERP has been popular for over a decade now.

“We don’t want to sell one solution to every customer, but we have some of the best breed of solutions for specific segments such as retail, manufacturing, distribution, finance and others.” Das Said.

Consumer sentiment remained on a high in 2010. On an average, the improvement remained 65 percent. Many chemical units have also reported growth in sales of over 20 percent in 2011. More than half, 53.3 per cent of respondent, have also reported 20 percent in export in 2010.

But price hikes of raw materials also seem to be inevitable, as fifty percent of respondents have found input prices to increase in 2010. Hence, product prices too increased according to 33.3 percent of respondents.