50 per cent UP SMEs sick

Lucknow, Feb 11 (UNI) About 50 per cent of small and medium enterprises (SME) in Uttar Pradesh are sick or heading towards sickness.

Besides, almost one-third of the 30,000 odd SMEs in UP at present are lying defunct, Indian Industries Association (IIA) President Tarun Kumar Kheterpal told UNI here today.

There are several reasons for the current sorry situation, including lack of proper infrastructure, power, roads, government apathy and subsidy to new industrial units, he added.

The SMEs are primarily located in a few industrial hubs of UP, namely Kanpur, Ghaziabad, Noida, Meerut, Ferozabad, Agra, Saharanpur and Bhadohi.

The sickness among SMEs is more pronounced in eastern UP compared to the western region of the state, he claimed.

''The basic reason for the deteriorating commercial viability of these units is the lack of proper marketing platform in the fast changing Indian corporate scenario, especially in the face of opening of economy to FDI in several sectors.'' ''Under the new WTO regime, SMEs are expected to compete with MNCs. However, sadly we are not even in a position to compete with units of other Indian states due to lack of facilities and UP Government support,'' Me Kheterpal lamented.

The IIA president listed the non-implementation of value added tax (VAT) in UP as one of the key factors for slow rate of industrialisation in the state.

''Unless VAT is implemented in UP, our product pricing will stand unfavourable vis-a-vis other states, where VAT is in foce,'' he warned.

However, Mr Kheterpal discounted the possibility of flight of industries to other states such as Uttarakhand and Himachal Pradesh.

''Although, the industries are not migrating, but they are setting up their new units in other states to take advantage of the various sops and tax holidays,'' he informed.

There is some good news on the industry front, he said. Almost 700 units are being set up in the laggard food processing sector in UP, which accounts for record potato, milk, sugarcane, sugar, wheat and mango production in the country.

Quoting recent official figures, Mr Kheterpal said the new units have already registered with the state government.

UNI