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Our Bureau

New Delhi, Oct.11 The second quarter of the current fiscal may well have been the upturn point for the micro, small and medium enterprises (MSMEs) sector, according to a MSME outlook survey conducted by the Confederation of Indian Industry (CII).

According to the survey, conducted among 300 MSMEs from across the country, 45 per cent of the respondents have registered an increase in their turnover, while 42 per cent saw a rise in their production. Moreover, 32 per cent of the respondents saw an increase in profitability, while 38 per cent have seen an increase in their order bookings.

This is in comparison to the first quarter of 2009-10, when 42 per cent and 43 per cent respondents registered a decline in their turnover and profitability respectively.

According to the CII, the positive shift in turnover and order bookings in the second quarter may be attributed to the ‘trickle down affect’ of the various stimulus packages announced by the Government and the Reserve Bank of India between December 2008 and January 2009.

“The positive sentiment built up in the second quarter is expected to carry forward into the third and the fourth quarter, as revealed by the survey,” the chamber said in a statement.

According to an assessment of the expectations for the third quarter, 54 per cent of the respondents expect an increase in turnover, while 43 per cent expect a rise in production and 45 per cent expect the order books to get fatter.

Also, 31 and 37 per cent of respondents expect an increase of their export and profitability, compared with the second quarter.

The chamber added that there are about 10 key issues that inhibit the growth and development of MSMEs, such as delayed payments, the high cost and lack of availability of credit, a lack of availability of risk capital, besides a complex indirect tax structure and lack of understanding on the forthcoming Goods and Services Tax.

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