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SME WORLD Bureau

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Page 3 of 4
He adds, ³Why India did not suffer much as our economy largely depends on agriculture and our
rural economy has nothing to do with international economic trends. The situation was worst six
months ago and now it is improving and will be still better in days to come. In the slowdown
phase, superfluous competition cropped up and suddenly a situation of 'survial of the fittest'
cropped up. We had to cut costs drastically which resulted in less output and less profits.´

³We did learn some hard lessons like making optimum use of resources, to face competition we
must provide better quality at competitive prices.´

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Praveen Gupta, a garment exporter in Gurgaon, has had better lessons to learn. ³We suffered like
no one business. We were without work overnight. That was a shock unbearable. We almost
closed our unit and had to turn away our 100 and odd employees with a heavy heart,´ he said and
added, ³the recessions did give us some lessons to learn. In fact we never apprehended such an
eventuality. Now we know somehow what we have to do in such a slowdown. We are now
exploring more markets as we get back to normalcy. In a way, we feel recession was good as we
learnt a lot.´

Anil Karkare, an autopart manufacturer running an ancillary unit in Pune is more bitter. ³What
has the government done for us. When we earn we pay all sorts of taxes and we are in difficult
times, no one comes to our rescue. There should be some kind of crisis management mechanism
to help units like us face crisis.´

SME mentor and an IPR trainer, Manisha Gupta believes that recession and recovery from
recession are not overnight affairs. ³Nothing happens in a short span of time, whether it is a
crisis happening or a recovery for that matter. We only come to know of such an economic
disaster when it actually strikes and this is when we get to see the EFFECTS or RESULT. But
the process itself is a long one and has been simmering for quite sometime. Thus the CAUSES
lay much deeper and have not been comprehensively addressed.´
³Similarly, though we may feel that the economy has started picking up and the worst should be
over soon, but little do we realize that actual recovery will take much longer. People who have
lost their jobs, and some even gave up their lives for not being able to face the pressures and
tensions thrown at them by this monster of Economic meltdown, can surely not recover so fast
even if they happen to land jobs again.´

  
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According to her, of the badly-hit SME sector, especially the manufacturing and the service
sector like tourism, hospitality, travel, real estate etc. the later can recover relatively quicker
because of the nature of its work. But those in the manufacturing sector will take a long time to
regain their business as well as confidence. ³With exports in most sectors having taken such a
hit, the losses are massive. We can't just say that all the cancelled orders or ³no orders´ of the
last 1 to 1 ½ yrs will now just be smoothened and all the backlog loss made up for in the next
few months.´

We failed to trace the signs of recession which started showing in the west much earlier. End
2007, the European and developed economies had started showing signs of melt down and
recessionary trends had set in. The trends became apparent in mid 2008, says Manisha.

³Financial Institutions are the life and blood of the economy and the collapse of such reputed
institutions such as Lehman Brothers pointed towards a deeper level of malaise and stress in the
economic structure. Financial Institutions are the heart of the economy, and as long as the heart
is alive, life goes on no matter how bad the situation of the rest of the body is. But the moment
the heart collapses, life stops, irrespective of how well the rest of the body is. The collapsing of
the FIs is the last straw for any economy.´

Being in the services sector - Knowledge, Innovation, Training and Education, she feels that it
was not affected so much by the economic slowdown. On the contrary, Training, Education,
Skills up-gradation and Vocational training are areas which in fact have experienced a positive
trend, says Manisha. ³The simple reason being, that the crisis has propelled people from all
sectors to upgrade their knowledge & skills and even go in for trainings in select areas to
enhance their competitiveness for better job prospects.´

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³Recession did teach us a few lessons. Knowledge, innovation, and stable networks provide a
safety net against sudden downturns and enable a person to recognize core support structures in
life. It is true for life and more so for professional life. This period has been a reality check for
the entire economy and the unbridled optimism and arrogance created a bubble which had to
burst some time or the other. The recession thus acted as a guide to build a stable and modular
future based on personal strengths and judicious investments. What one learns from this
financial crisis is that traditional core values of sincerity, commitment, integrity and loyalty still
hold water and have the strength to pull you out from any crisis situation however deep.´