Poor Technology and Infrastructure are Crippling Indian MSME Clusters

According to Federation of Indian Small and Medium Enterprises (FISME), Indian Micro, Small and Medium Enterprises clusters encounter many challenges, among which lack of infrastructure and technology are the major ones. The MSMEs in India are present in different groups. They range from old artisan clusters to highly advanced industrialized clusters. The challenges faced are also vary across MSME clusters.

With regard to the cluster development, India is still in the learning period. The schemes too are in the maturing stage, but due to the foregoing challenges, output is not remarkable.

Further, due to the absence of trust among major cluster associations and state agencies, the collective initiative is not being executed. The cluster development program launched by Government of India for MSMEs through holistic development of value and supply chain management has not been successful due to the deficiency of trust.

According to The Southern India Mills’ Association (SIMA), development of clusters in India is deficient in many factors. Some of these factors that are critical for cluster development are

  • Solution for environmental issues at viable costs
  • Availability of skilled workers
  • Uninterrupted and quality power supply
  • R and D support
  • Development of integrated parks with 100 percent funding by government for common infrastructure facilities
  • Flexible labor laws
  • Funds at internationally competitive rates etc.

Apart from the above measures, Government of India should also implement measures to provide common infrastructure facilities like effluent treatment at an affordable cost; marketing and training facilities; tie-up with overseas markets; development of indigenous technology as it is in China to reduce the cost of investment; R and D facilities; technology up-gradation fund scheme; cost of funding (special package for working capital); and exemption from the existing labor laws.