Sunday, November 16, 2008

SME sector-I

Small and medium enterprises (also SMEs, small and medium businesses, SMBs, and variations thereof) are companies whose headcount or turnover falls below certain limits.
The abbreviation SME occurs commonly in the European Union and in international organizations, such as the World Bank, the United Nations and the WTO. The term small and medium-sized businesses or SMBs is predominantly used in the USA.
EU Member States traditionally had their own definition of what constitutes an SME, for example the traditional definition in Germany had a limit of 500 employees, while, for example, in Belgium it could have been 100. But now the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 50 employees as "small", and those with fewer than 250 as "medium".[1] By contrast, in the United States, when small business is defined by the number of employees, it often refers to those with fewer than 100 employees, while medium-sized business often refers to those with fewer than 500 employees.
Both US and EU generally use the same threshold of fewer than 10 employees for small offices (SOHO).
In most economies, smaller enterprises are much greater in number. In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people. In many sectors, SMEs are also responsible for driving innovation and competition. Globally SMEs account for 99% of business numbers and 40% to 50% of GDP.
In India, the Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39 per cent of the manufacturing output and around 33 per cent of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 31 million persons spread over 12.8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.[2]
In South Africa the term SMME, for Small, Medium and Micro Enterprises, is used. Elsewhere in Africa, MSME is used, for Micro, Small and Medium Enterprises. Size thresholds vary from country to country.
The lack of a universal size definition makes business studies and market research more difficult.
SMEs IN INDIA
With the advent of planned economy from 1951 and the subsequent industrial policy
followed by Government of India, both planners and Government earmarked a
special role for small-scale industries and medium scale industries in the Indian
economy. Due protection was accorded to both sectors, and particularly for small-
scale industries from 1951 to 1991, till the nation adopted a policy of liberalization
and globalization. Certain products were reserved for small-scale units for a long
time, though this list of products is decreasing due to change in industrial policies
and climate.
SMEs always represented the model of socio-economic policies of Government of
India which emphasized judicious use of foreign exchange for import of capital goods
and inputs; labour intensive mode of production; employment generation; non-
concentration of diffusion of economic power in the hands of few (as in the case of
big houses); discouraging monopolistic practices of production and marketing; and
finally effective contribution to foreign exchange earning of the nation with low
import-intensive operations. It was also coupled with the policy of de-concentration of
industrial activities in few geographical centers.
It can be observed that by and large, SMEs in India met the expectations of the
Government in this respect. SMEs developed in a manner, which made it possible
for them to achieve the following objectives:
• High contribution to domestic production
• Significant export earnings
• Low investment requirements
• Operational flexibility
• Location wise mobility
• Low intensive imports
• Capacities to develop appropriate indigenous technology
• Import substitution
• Contribution towards defense production
• Technology – oriented industries
• Competitiveness in domestic and export markets

At the same time one has to understand the limitations of SMEs, which are:
• Low Capital base
• Concentration of functions in one / two persons
• Inadequate exposure to international environment
• Inability to face impact of WTO regime
• Inadequate contribution towards R & D
• Lack of professionalism
In spite of these limitations, the SMEs have made significant contribution towards
technological development and exports.
SMEs have been established in almost all-major sectors in the Indian industry such
as:
• Food Processing
• Agricultural Inputs
• Chemicals & Pharmaceuticals
• Engineering; Electricals; Electronics
• Electro-medical equipment
• Textiles and Garments
• Leather and leather goods
• Meat products
• Bio-engineering
• Sports goods
• Plastics products
• Computer Software, etc.
As a result of globalization and liberalization, coupled with WTO regime, Indian
SMEs have been passing through a transitional period. With slowing down of
economy in India and abroad, particularly USA and European Union and enhanced
competition from China and a few low cost centers of production from abroad many
units have been facing a tough time.
Those SMEs who have strong technological base, international business outlook,
competitive spirit and willingness to restructure themselves shall withstand the
present challenges and come out with shining colours to make their own contribution
to the Indian economy

Friday, November 14, 2008

SME sector

The importance and contribution of the SME sector to the economic growth and prosperity is well established. Their role in terms of employment creation, upholding the entrepreneurial spirit and innovation has been crucial in fostering competitiveness in the economy. Towards meeting the National developmental objective of a growth rate of over 8% on a sustained basis, it is imperative for the industrial sector to grow at a faster pace supported by a vibrant SME sector. Towards this, Government’s policy initiatives like enactment of the new Micro Small and Medium Enterprises Development Act, 2006, pruning of reserved SSI list, advising FIs to increase their flow of credit to the SME sector, are all initiatives towards boosting entrepreneurship, investment and growth.
With the bridging of the information gap on the SME sector attempted through periodical census, formation of CIBIL and SMERA, policy makers prescription has been to make information available to the lenders to not only extend financial support to creditworthy SME units and to approach proactively SME units in initial stages of development. Providing quality information is particularly essential in this era of globalisation wherein Indian SME sector face competition from domestic players as well as from imports. There exists further scope for increasing their export potential, market share in domestic market and them achieving status of serious players in the ‘Global Value Chain’. Access to finance and capital are the key resources for improved competitiveness and effective operations of SMEs. Providing support to SMEs in this critical area has been the raison d’ĂȘtre of SMERA. It has been our commitment to develop a strong and vibrant SMEs segment that acts as the backbone of India’s industrial sector. SMERA has been contributing to this goal by providing ratings to these firms, to enable their sustained and vibrant growth. SMERA recognises this potential of the SME segment and the benefits it holds for our nation.It is in this context SMERA, jointly with Dun & Bradstreet India, is proud to launch the publication series, Emerging SMEs of India.
The high fragmented nature of the SME segment makes availability of information difficult. A one-point reference document listing SMEs was imperative at this juncture. We hope to fulfil this long felt need. The publication has attempted to provide critical information on 370 companies and provide a concise profile of their activities. It aims to bring out the best SMEs and project them before domestic corporates outsourcing their needs to SMEs and also potential importers on the lookout for reliable SMEs to source their requirements.
The current endeavour is an effort to fill the void and provide Indian SMEs a platform where they can interact, learn and do networking with stakeholders in associated events together with brand building. We are sure that this publication will benefit many individuals, banks, corporates, government institutions and agencies that provide support and promote the SMEs.
Through this pioneering initiative, SMERA re-dedicates itself to serving the small and medium enterprises of India.

Thursday, November 13, 2008

exchange rate movements

Indian Rupees to 1 USD (invert,data)
120 days
latest (Oct 21)49.1
lowest (May 29)39.2
highest (Oct 21)49.1

British Pounds to 1 INR (invert,data)
120 days
latest (Oct 21)0.0120963
lowest (Jul 15)0.0115747
highest (May 29)0.0129107

Tuesday, November 11, 2008

Public Private partnership

Public-private partnership
Public-private partnership (PPP) describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. These schemes are sometimes referred to as PPP or P3.
In some types of PPP, the government uses tax revenue to provide capital for investment, with operations run jointly with the private sector or under contract (see contracting out). In other types (notably the Private Finance Initiative), capital investment is made by the private sector on the strength of a contract with government to provide agreed services. Government contributions to a PPP may also be in kind (notably the transfer of existing assets). In projects that are aimed at creating public goods like in the infrastructure sector, the government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the private investors. In some other cases, the government may support the project by providing revenue subsidies, including tax breaks or by providing guaranteed annual revenues for a fixed period.
Typically, a private sector consortium forms a special company called a "special purpose vehicle" (SPV) to develop, build, maintain and operate the asset for the contracted period. In cases where the government has invested in the project, it is typically (but not always) allotted an equity share in the SPV. The consortium is usually made up of a building contractor, a maintenance company and bank lender(s). It is the SPV that signs the contract with the government and with subcontractors to build the facility and then maintain it. In the infrastructure sector, complex arrangements and contracts that guarantee and secure the cash flows, make PPP projects prime candidates for Project financing. A typical PPP example would be a hospital building financed and constructed by a private developer and then leased to the hospital authority. The private developer then acts as landlord, providing housekeeping and other non medical services while the hospital itself provides medical services.
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Origins
Pressure to change the standard model of Public Procurement arose initially from concerns about the level of public debt, which grew rapidly during the macroeconomic dislocation of the 1970s and 1980s. Governments sought to encourage private investment in infrastructure, initially on the basis of accounting fallacies arising from the fact that public accounts did not distinguish between recurrent and capital expenditure.
The idea that private provision of infrastructure represented a way of providing infrastructure at no cost to the public has now been generally abandoned, interest in alternatives to the standard model of public procurement persisted. In particular, it has been argued that models involving an enhanced role for the private sector, with a single private sector organisation taking responsibility for most aspects of service provisions for a given project, could yield an improved allocation of risk, while maintaining public accountability for essential aspects of service provision.
Initially, most public-private partnerships were negotiated individually, as one-off deals. In 1992, however, the Conservative government of John Major in the United Kingdom introduced the Private Finance Initiative (PFI)[1], the first systematic program aimed at encouraging public-private partnerships. In the 1992 program, the main focus was on reducing the Public Sector Borrowing Requirement, although, as already noted, the effect on the public accounts was largely illusory. The Labour government of Tony Blair elected in 1997, persisted with the PFI sought to shift the emphasis to the achievement of "value for money" mainly through an appropriate allocation of risk.
A number of Australian state governments have adopted systematic programs based on the PFI. The first, and the model for most others, is Partnerships Victoria.
Early problems
Because of the focus on avoiding increases in public debt, many private infrastructure projects in the early 1990s involved provision of services at substantially higher cost than could have been achieved under the standard model of public procurement. The central problem was that private investors demanded and received a rate of return that was higher than the government’s bond rate, even though most or all of the income risk associated with the project was borne by the public sector.
A number of Australian studies of early initiatives to promote private investment in infrastructure reached the conclusion that, in most cases, the schemes being proposed were inferior to the standard model of public procurement based on competitively tendered construction of publicly owned assets (Economic Planning Advisory Commission (EPAC) 1995a,b; House of Representatives Standing Committee on Communications Transport and Microeconomic Reform 1997; Harris 1996; Industry Commission 1996; Quiggin 1996).
One response to these negative findings was the development of formal procedures for the assessment of PPPs in which the central focus was on "value for money" rather than reductions in debt. The underlying framework was one in which value for money was achieved by an appropriate allocation of risk. These assessment procedures were incorporated in the Private Finance Initiative and its Australian counterparts from the late 1990s onwards.
Subsequent debate
Although the general view that governments should seek "value for money" has been widely accepted, there have been continuing disputes over whether the guidelines designed to achieve these goals are appropriate, and whether they have been correctly applied in particular cases. Much of the discussion has been based on debates over the UK Private Finance Initiative.
PSPP Variant
Some social enterprises have proposed, or are operating, partnerships with the state and commercial partners which they call Public Social Private Partnerships (PSPP) .
Public-Private Product Development Partnership (PDP)
PDPs are a class of PPPs that focus on health product development for diseases of the developing world. PDPs have formed over the past decade to unite the public sector's commitment to international public goods for health with private industry's expertise in product development and marketing. These not-for-profit organizations bridge public- and private-sector interests, with a view toward resolving the specific incentive and financial barriers to increased industry involvement in the development of safe and effective products.
Specific cases
While some PPP projects have proceeded smoothly, others have been highly controversial. Australian examples include: Airport Link, the Cross City Tunnel, and the Sydney Harbour Tunnel, all in Sydney; the Southern Cross Station redevelopment in Melbourne; and the Robina hospital in Queensland.
Some examples
International
Some international health care programs may be considered public-private partnerships:
The Global Alliance for Vaccines and Immunization is financed per 75% (750 Mio.US$) by the Bill and Melinda Gates Foundation, which has a permanent seat in the supervisory board of GAVI.
As a UN agency, the WHO is financed through the UN system by contributions from member states. In recent years, the WHO's work has involved more collaboration with NGOs and the pharmaceutical industry, as well as with foundations such as the Bill and Melinda Gates Foundation and the Rockefeller Foundation. Some of these collaborations may be considered global public-private partnerships (GPPPs); half the WHO budget is financed by private foundations.
The Global Fund to Fight AIDS, Tuberculosis & Malaria, a Geneva based UN connected organisation, established in 2002 to dramatically upscale global financing of interventions against the three pandemics.
The TB Alliance is financed by public agencies and private foundations, and partners with research institutes and private pharmaceutical companies to develop faster-acting, novel treatments for Tuberculosis that are affordable and accessible to the developing world.
DNDi, the Drugs for Neglected Diseases Initiative was founded in 2003 as a not-for-profit drug development organization focused on developing novel treatments for patients suffering from neglected diseases.
The International AIDS Vaccine Initiative (IAVI), a biomedical public-private product development partnership (PDP), was established in 1996 to accelerate the development of a vaccine to prevent HIV infection and AIDS. IAVI is financially supported by governments, multilateral organizations, and major private sector institutions and individuals.
[Public Private Partnerships for Disaster Management] http://www.responsenet.org/show.detail.asp?id=9658 , brings together the Private sector for PPP models with a tool box of partnership opportunities towards Towards Resilient & Sustainability Goals
The Public Private Partnership for improving teaching and learning in schools in Abu Dhabi, United Arab Emirates.
Australia
Southbank Education and Training Precinct, Brisbane
Adelaide-Darwin Railway (a BOOT arrangement)
Airport Link, Sydney
Cross City Tunnel, Sydney
Eastern Distributor, Sydney
Lane Cove Tunnel, Sydney
Sydney Harbour Tunnel, Sydney
M2 Hills Motorway, Sydney
M4 Western Motorway, Sydney
M5 South Western Motorway, Sydney
Westlink M7, Sydney
CityLink, Melbourne
EastLink, Melbourne
Newcastle Mater Hospital Redevelopment, Newcastle, NSW
Southern Cross Station, Melbourne
Headquarters Joint Operations Command (HQJOC)construction and maintenance of a major Defence facility. Queanbeyan and Bungendore, [NSW]
Canada
The 407 ETR toll road north of Toronto, Ontario
The Royal Ottawa Mental Health Centre in Ottawa, Ontario
The William Osler Health Centre in Brampton, Ontario
The Viva bus rapid transit network in York Region, Ontario
Confederation Bridge construction in Prince Edward Island
Canada Line automated rapid transit service in Greater Vancouver, British Columbia.
MaRS Discovery District a partnership, in Toronto, to commercialize publicly funded medical research with the help of private enterprises.
The western portion of the Highway 30 project west of Montreal, Quebec
East Africa
In the realm of international development, public private partnerships are common as the host government is supported by international private sector investment. The Gates Foundation and the Global Fund for Aids, TB and Malaria donate medical commodities and technical support to strengthen health service delivery at government institutions.
Many non-governmental organisations also support public private partnerships in health service delivery. In Kampala, the International Hospital provides the facilities for complex surgery with finance support from the Ugandan government. At the smaller scale, Hope Clinic Lukuli is providing philanthropic primary health care using government and donor funded health commodities.
Germany
TerraSAR-X, Friedrichshafen
India
NISG, Hyderabad
Ireland
PPPs are being increasingly used in Ireland to deliver both major and minor infrastructural projects.
National Maritime College of Ireland
West-Link bridge on M50 motorway in Dublin
New Zealand
Vector Arena in Auckland is one public-private partnership in New Zealand. The Auckland City Council and Auckland Regional Council have contributed $68 million toward the $80 million indoor multipurpose arena. Ownership will be transfered back to the city in 40 years from completion.
United Kingdom
Private Finance Initiative
The maintenance of London Underground: Metronet and Tube Lines (since 2003)
National Air Traffic Services (since 2001)
Some National Health Service (NHS) hospitals and other agencies
Firrhill High School
Williamwood High School
Beath High School, Cowdenbeath
Queen Anne High School, Dunfermline
Stirling High School and various schools in the Stirling area
Brentside High School, London
Stranraer Academy
Douglas Academy, Milngavie, Glasgow
Grosvenor Grammar School, Belfast
United States
California Fuel Cell Partnership (CaFCP)
State Route 125, San Diego, California
Central Park, New York City
Chicago Skyway Bridge, Chicago, Illinois
Dulles Greenway, suburban Washington, DC
Indiana East-West Toll Road, (Interstate 80/Interstate 90), Northern Indiana
Las Vegas Monorail, Nevada
Southern Indiana Toll Road, (Interstate 69, proposed), Martinsville to Evansville, Indiana
The redevelopment of downtown Chattanooga, Tennessee from the mid-1980s to present.
Pocahontas Parkway, suburban Richmond, Virginia
Riverside County Library System, Riverside, California
Silver Line (Washington Metro), suburban Washington, DC
HOT (High Occupancy or Toll) Lanes on the Capitol Beltway, suburban Washington, DC, [2]
Water Taxi Beach, Hunters Point, Queens, New York
InfraGard [3]
Federal Reserve