Rising property prices are a barrier to industrial growth

- Antenna: Vivek Mehta

- Develop a system to control land prices and create a system where start-up entrepreneurs do not have to invest large capital to create employment.

Whether it is Gujarat or India, small and medium enterprises generate more employment than large enterprises. Larger businesses rely heavily on machine-based technology and automation, creating less direct employment. Former Reserve Bank Governor D. Subbarao has recommended more help to small businesses to keep India's economy afloat. But the responsibility of financing small businesses, of making payments after supply, of not receiving unpaid capital, remains.

These problems exacerbate their conflict. New entrepreneurs, on the other hand, cannot come forward. They have limited capital. With this limited capital he is able to play. Banks are not keen on lending to them. Start-ups also come with new innovations, but they do not have the finances themselves. So they eat me. Start-ups have to invest heavily in land and property in addition to investing in machinery and skilled manpower. This investment prevents them from moving forward in their venture. Rising property prices are a major impediment to the growth of small businesses, new entrepreneurs and start-ups, says Vatva, a leading industrialist.

Here are the reasons. New entrepreneurs have to raise their own capital. It requires investment in machinery. It also requires investment in manpower. Second, even if they get bank finance, its interest rates are higher than those offered to large corporates. Banks with surplus funds prefer large corporations to lend to small businesses as corporates carry billions in loans at once. Third, even if small entrepreneurs manage to invest in skilled manpower and machinery, it is very difficult for them to invest in land. Even among the industrial estates in Gujarat, there are very few new settlements after Sanand. It may be cheaper to get out than land, but it does not have the basic facilities like sewerage, water, light roads. This feature is not ready in time. If they want to take land outside the industrial estate, they have to postpone the venture for five to ten years. When he acquires the strength to take the property in five to ten years, the price of that property has doubled or doubled from the price of five years ago. At the same time, there is talk of renting space and starting new ventures, but since the rents are very high, new entrepreneurs are likely to not be able to afford it. The first requirement in this context is to set up a system to control land prices. They are making every effort to ensure that land prices do not fall as builders, corrupt politicians and government officials are embroiled in corruption. But it is stunting industrial growth.

In these circumstances, if the government really wants to accelerate the growth of small businesses rather than create jobs and provide employment to the people, then the government needs to continue its efforts to curb the skyrocketing prices of land. If land is to be allotted in an industrial estate, it is necessary to provide land as well as infrastructural facilities. Doing so will not hinder the advancement of their ventures and will accelerate their growth. Fourth, the government has created ITIs to generate skilled manpower. He has also given subsidy for it. But if the same ITIs are converted into a center that provides skills tailored to the needs of the industry in the area, the fragrance will be mixed with gold. To give an example, if there is a cluster of engineering, there should be a single center that trains all the skills required to make engineering machinery. Doing so will reduce the shortage of skilled manpower. In addition, new entrepreneurs will be able to get manpower with basic training in addition to four experienced men at a lower price. Because of this, they will not be burdened with a huge salary.

In order to create employment by accelerating industrial development, a system has to be developed to control land prices, speed up the development of infrastructure and ensure that start-up entrepreneurs or new ventures do not have to make huge capital investments.