Yerram Raju--MSME

The Story of Indian MSMEs by Dr.Yerram Raju ; Published by Konark ;Pages 224 ; Price Rs 750/-

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Dr.Yerram Raju served for over three decades in the S B I and taught in highly reputed institutions. RBI appointed him in two expert committees. He was a distinguished Member of the Jury for the Asia Pacific Bankers’ Congress at Manila for two years in a row on S M E Sector. He has 15 books to his credit and he is a prolific contributor to both national and international journals.

The book under review deals with the problems of the Micro,Small and Medium Enterprises (SMEs).However,it concentrates on the manufacturers and small enterprises. A perennial problem for this sector has been the issues of capital and adequate working capital from the lending institutions. While we have witnessed a constant flow of directives from the R B I and the Government of India, we also notice that—as amply proved by the case studies presented by Dr.Raju—there has been no assured flow of adequate credit. The MSME sector has to be nursed carefully in the harsh background of global problems such as competitiveness and volatility of the market.

MSMEs are highly significant as they are an integral part of the value chain, are job—intensive and contribute more than proportionately to exports.

The book is about the policy initiatives of the Union and State Governments. It is about how the sector has been progressive over the years and affirms the author’s belief that we are not going to repeat the past but shall strike a new bold path .

The MSME sector in India is highly hetero-genous in terms of the size of the enterprises, variety of products, services rendered and the levels of technology employed.

The important chapter “MSME business environment and challenges” neatly incorporates the crucial parameters of the sector. It lays emphasis on Human Resource Development challenges,the inherent risks and the paramount need of banks to tighten their credit appraisal standards.

Another chapter reviews the MSME sector policies

in terms of where we are, where we want to go and how to achieve our aims, especially in the global context. The way forward for the nation is to encourage investments in research and development, protection of intellectual property rights and financing of incubation centres.

The author has provided a detailed analysis of the features of the subsectors -Engineering and Fabrication, Auto components, Food Processing, Textiles and Handicrafts.

Existing schemes available for MSME sector are analysed thoroughly and new schemes are identified—such as “Make in India”-“Startup India” --and well covered.

Business Development Service providers are assessed critically and suggestions for their improvement are given.

The crucial problem of finance is discussed at considerable length.The role of bank, Mudra, Sidbi,Credit Guarantee Trust for micro and small enterprises are adequately covered. The author has assessed the Cluster-based approach of lending. The access of SMEs to capital markets is studied in one chapter and the author has compared it with the experience in a number of foreign countries. The MSME Ministry needs to take into consideration the emerging investment start-ups as a visionary. More incentives must be given for manufacturing start--ups among the SMESs.

One chapter relates to the dreaded subject “Non-performing Assets”.The causes, viability norms, areas of intervention,reliefs and concessions are lucidly analysed by Raju.

Seven countries have been selected to provide a view of “Global Best Practices” and this is valuable.

The role of technology has been thoroughly analysed and Raju calls for more positive action to ensure competitiveness among SMEs. He also calls upon regulatory institutions to own up responsibility and make certain that Government follow these policies in word and spirit. The Telengana Health Clinic Ltd—with which Raju is closely connected—has presented a brilliant example of strategies to revive MSMEs in the manufacturing sectors which is explained to us by the author.

Case are provided which illustrate the best practices to help upcoming enterprises---especially in the supply chain,human resource, management and finance.

Failures are stepping stones to success and as such seven case studies of failures are succinctly presented with pointers to achieve success.

There is a neat presentation of the guiding factor for future policy direction.

One cannot but agree with the scholarly “Foreword” of Dr.D.Subbarao,ex—Governor of RBI, who declares “...Drawing from these lessons of experience, Dr.Raju makes very instructive policy recommendations covering the entire cycle of MSME—Starting, Running and Closing.”

This is a very valuable book for policy makers, industrialists, analysts and enthusiastic entrepreneurs.

P.P.Ramachandran.

22/12/2019.