The Indian economy is on the path of steady growth with the manufacturing sector of the SMEs. The structural transformation of the manufacturing sector in India has observed a spectacular growth in the past few decades. The manufacturing sector of the respective SMEs has grown substantially in the recent years. However, the rapid growth of the manufacturing sector of the SMEs is attaining great maturity which is not a good sign. An economy which is based on knowledge cannot be sustained on the long-term basis unless it is supported by the growth of the manufacturing sector of the SMEs. The sectors like the ITEs, IT and pharmaceuticals are supposed to compete in the global scenario and are responsible for bringing wealth to the Indian economy.
The main reason of the lack of competition in the manufacturing sector of the SMEs is the major presence of the unregistered small-scale manufacturing units under the SME sector which are widespread across the country. A large number of such manufacturing units which are not registered are created due to the artificial market distortions. The fragmentation of the small manufacturing units of the SME sector has been observed to be detrimental to the competitiveness of the units. The main reasons for the lack of healthy competition in the manufacturing units of the SMEs are:
- Poor quality of the infrastructure of the transport facilities across all the sectors of the SMEs including roadways, railways, airways, port facilities and waterways.
- Expensive power due to the high cost of the industrial power in the manufacturing units.
- The high cost of capital in the manufacturing sector of the SMEs.
It is the crucial role of the Government to provide the manufacturing industries with favorable investment opportunities to support better infrastructure, affordable finances at a low rate of interest, promoting the accelerated growth with respect to fiscal and other policies of the manufacturing sector in the SMEs. In addition to the efforts by the government, the manufacturing enterprises must also focus on the implementation of the effective internal changes which must be aimed at improving the overall efficiency and in the reduction of the overall costs of production to promote greater profits.
The main parameters to be considered by the manufacturing units under the SMEs include:
- Upgrading the technology level of the manufacturing sector.
- Laying emphasis on retaining the talent and the attraction of the same.
- Redesigning of the organizational structure to enhance the responsiveness and accountability of the manufacturing units.
- Formulating the product and operations strategy and the explicit factoring of the opportunities in the export markets of the manufacturing units.
- Enhancing the overall quality of the products and services and the overall customer experience.
- Re-engineering the main processes involved in the manufacturing of various products. This will help in the improvement of the efficiency in a significant manner and in driving the proper business value to the respective manufacturing units under the SME sector of the Indian economy.