Government Support for Small and Medium-sized Businesses: Experiences and Realities

The debate around government support for small and medium-sized businesses (SMEs) often revolves around rhetoric and practical implementation. While many politicians and administrators promise a wealth of assistance, the reality is starkly different for the businesses on the ground. This article delves into one individual's experience with government policies intended to aid SMEs.

Personal Experiences with Government Support

I have been running my business in Coimbatore, Tamil Nadu, since 2004, meticulously managing it with my own funds. However, the first lockdown in 2020 brought severe challenges. Despite the initial promises of support from the Finance Minister, my experience has been far from what was advertised.

When the Finance Minister, Mrs. Nirmala Sitharam, spoke about support schemes during the 2022 budget, I eagerly sought bank support hoping for government assistance. However, my request was denied by the Bank of Baroda, with no clear reason given other than their internal policies.

The next budget brought a new initiative aimed at supporting women entrepreneurs. While this sounded promising, alas, the reality did not match the rhetoric. When I tried to establish a new company after obtaining a foreign degree and accumulating four years of experience, the bank again denied my request, citing their own internal norms.

Legislation and Practical Implementation

It is crucial to understand that the level of government support differs by country. Generally, governments provide various kinds of support, including funding at favorable rates, access to government tenders, and legislative frameworks that favor SMEs. However, these benefits often remain on paper without practical execution.

For example, while national governments may 'suspect to help under certain circumstances,' the actual implementation can be hindered by bureaucratic norms and prejudices. The case of the Businesswoman Entrepreneurship Scheme, floated after the 2022 budget, exemplifies this issue. Despite the potential benefits, banks continue to uphold strict lending norms even for established SMEs.

Country-Specific Considerations

The support for SMEs is country-specific. In India, for instance, there are several initiatives and schemes designed to aid businesses. However, the practical execution often faces significant hurdles. Banks, while willing to lend millions to politicians, remain stringent with their lending norms for traders and businesses.

A key example is the way the 'GOVERNMENT HELP SMEs' initiative, which was allegedly floated by the BJP as an election stunt, has not translated into meaningful support for entrepreneurs. The constant denial of loans and credits suggests a disconnect between policy and practice.

Conclusion and Call to Action

While politicians and administrators continue to promise support for SMEs, the ground reality often falls short of these promises. Businesses, faced with financial challenges and strict lending norms, must continue to advocate for real, practical support. Government bodies must work towards streamlining processes and ensuring that the policies and schemes they propose are effectively implemented to benefit all SMEs.

Customers and the general public must also hold government officials accountable for their promises and ensure that the support promised to SMEs is more than just rhetoric and actually translates into tangible benefits.