KOCHI: The Working Group on Modern Small and Medium Industries for Kerala has suggested, among other things, setting up of an Enterprise Commission, establishment of an Enterprise Development Fund and the reorganisation of the Directorate of Industries and Commerce.

The working group, chaired by P.M. Mathew, Director of the Kochi-based Institute of Small Enterprises and Development (ISED), also suggested that the Government pass an Enterprise Development Act, set up an Enterprise Development Fund with a corpus of Rs.75 crore, introduce a reward system based on the employment contribution of assisted units and that the Planning Board be given a more significant role in monitoring and evaluating programmes.

The report of the working group comes in the background of the draft approach paper to the 11th Plan stating the need for larger Plan size, enhanced employment opportunities and resistance to the ill-effects of the process of globalisation.

The report pointed out that globalisation had completely changed the relevance of SMEs. In Kerala SMEs had a crucial role to play as a major growth primer, said a brief of the report made available here on Monday.

The thrust of the report was towards a more transparent and accountable regime that would include "meaningful participation" of local self-Governments (LSGs) in enterprise development and logical positioning of the cluster development programme under a Local Economic Development Model with active participation of the LSGs and effective social control.

The report also identified several thrust areas that include ancillarisation, pharmaceutical and surgical instruments, packaging products, food processing, Ayurveda products and services, local tourism, footwear, information technology and biotechnology, rubber products, bioproducts, publishing and garments industry.

The working group felt that microenterprises needed protection vis-à-vis the incursions of MNCs and corporates. The graduation of microunits to modern SME sector should be nurtured.

The focus should be on business demography and instrumentalities that help maintain healthy enterprises, said the report as it pointed to "pessimism" in the investment scene in Kerala and called for dispelling this pessimism forming the core of new policy approach.

The working group initiatives were on campaign and mission modes, enhanced accountability of promotional agencies, critical minimum size for enterprise development and employment generation.

The group suggested that the thrust of the SME policy should be on bringing down business death rates and enhancing birth rates.

This required a policy environment conducive to existing enterprises and maintenance of enterprise health standards through preventive care followed by correctives.

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