Small people, Big Achievements

Wednesday, August 15, 2007

Thousands of kilometres of tarmac have been laid out since the Jamsahib (Maharaja of Jamnagar) sent his wife?s pair of pink slippers to Rolls-Royce so that the carmaker could exactly match the colour of his new Phantom II.

Sixty-years since democracy spelt the doom for such royal demeanour, Jamnagar, a small town on India?s western coast in Gujarat, has come to be known much more for a refinery that one man without the legacy of a Birla or a Tata built, symbolising the rise of a new breed of entrepreneurs in India.

The Rolls-Royce Phantom is back in its modern avatar. The one that landed nearest to Jamnagar, in Ahmedabad, belongs to a man from Bharuch who started Cadila Industries, a pharma company, in 1951 and pedalled medicines to chemists on a bicycle.

Eighty-one year old Indravardhan Modi?s Cadila Pharmaceuticals generated Rs 650-crore in revenues last year. He is proud of the contribution, albeit in a very small measure, he has made to the country?s GDP. ?Emerging entrepreneurs come with fresh ideas. They change the way we live,? says Mr Modi.

Lakhs of smaller companies like Cadila have indeed played a big role in the ?India Growth? story. Experts opine that if India?s GDP takes a leap into the future, small and medium enterprises (SMEs) have to play a stellar role. And they will come up from across the country, from its remotest parts.

Today, SMEs are playing a crucial role in India?s economic development. They have a 40% share in industrial output, producing over 8,000 value-added products. They contribute nearly 35% of direct exports and 45% of the overall exports from the country and are among the biggest employers after agriculture, providing employment to over 28 million people. The 3 million-plus SME units that India has in various parts of the country, produce a diverse range of very basic to highly sophisticated products.

Till a few years ago, SMEs conjured up images of small manufacturing units tucked away in some out-of-town industrial area. This was true when the government played a big role in promoting SMEs, through policies that made it mandatory for certain categories of products to be manufactured only by the small scale sector.

Many of them became suppliers to large manufacturers, and have stayed that way. Many others grew to become bigger players. ?Even an L&T and Reliance started out in a modest way. But as they grow big they start sub-contracting, or outsourcing, to smaller or newer units. The prosperity of large companies is linked to smaller firms. This generates new employment, investments and helps creating infrastructure in the region and for the nation at large,? says business historian Dwijendra Tripathy.

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Source: Economic Times (link opens in a new window)