Despite the present gloom in the economy, SMEs remain optimistic of the FY 2014-15 and expect high growth rate in the current year.
Despite the present gloom in the economy, SMEs remain optimistic of the FY 2014-15 and expect high growth rate in the current year. According to the latest SME Sentiment Survey conducted by IndiaMART.com, India's largest online B2B marketplace, 66 per cent SMEs predict improved business conditions in the coming quarter (2014-15) that will yield them better growth.
The survey run amongst SMEs across industries throws light on past year's business experience, challenges, exports demand, and business confidence and major expectations from the coming year.
What is interesting is the fact that the business confidence amongst SMEs remains high as almost 21 per cent respondents have given a rating of 7.3 on a scale of 10. The same ratings dropped drastically (5.8) when the SMEs were asked to rate on the prospects of India's economy.
On the launch of the report, Dinesh Agarwal, Founder & CEO IndiaMART.com, said, "SMEs' growth prospects have been stunted due to slowdown witnessed in the economy. However, they seem to have a positive outlook for this year and hope to have a good business year ahead. The SME Sentiment Survey is a holistic reflection of their past experience and future expectations."
Unveiled early May this year, the survey results showed that most SMEs (38 per cent) have had a growth under 5 per cent in the financial year 2013-14. During the same poll, whopping 82 per cent participants have admitted that their input costs had escalated in the past year, which could be the reason for the slow growth. But all hopes haven't been lost yet as over 50 per cent of the respondents have reported a growth expectation of more than 20 per cent in 2014-15.
On account of challenges being faced by the sector, marketing remains a key challenge for SMEs while factors such as poor sales, competition from large businesses, government regulations were ranked second, third and fourth respectively. This was followed by shortage of skilled employees, taxes, finance and access to IT. The survey also revealed the movement of exports demand in the last year.