"The emergence of a new generation of Indian enterprise is one of the great success stories of our time. Indeed, there are few parallels in the developing world for such a phenomenon. The values of an open economy and an open society enshrined in our Constitution have after some initial hiccups enabled lakhs of first generation entrepreneurs to flower impressively in the course of a single generation. This is a matter of great pride for all of us. It shows that as new opportunities emerge, we Indians are ready to make full use of them. We are second to none when it comes to creativity and enterprise. I salute the spirit of enterprise of our people.

There is a commonly held but not fully accurate notion that, in the post-independence period, the Indian economy was essentially a government dominated public sector economy. It is true that in the early years, the public sector had to step in to create the foundations for the subsequent growth of private enterprise. It is also true that private enterprise was constrained by a plethora of controls and regulations. However, private enterprise did grow wherever opportunities presented themselves. That is a story whose time has come. This has been particularly in evidence in the last 15 years when we launched the programme of liberalization of our economy.

Much has been said and done to celebrate the growth of modern Indian enterprise in recent years. However, much of this celebration has been confined to the success of big business houses. I do not deny this success. But, the profile of top business houses has seen a sea-change between early 1950 and today. Large private business groups have overtaken public sector firms and more interestingly, first generation entrepreneurs have overtaken more established business houses. And many of them began as SMEs. This does point to dynamism in our corporate sector. It also provides hope and confidence that many of you here today will smoothly transform yourselves into large industrial houses in the future in years to come. It is this animal spirit of enterprise and creativity, nurtured by the SMEs, that we have unleashed and which is going to be the vehicle for our sustained growth.

The growth and spread of small and medium enterprises in the last six decades is impressive. They have contributed both to the growth of new industries as well as of new industrial centres. Cities and towns like Surat, Rajkot, Tiruppur, Coimbatore, Hosur, Faridabad, Ludhiana, Visakhapatnam and scores of others have come up because of the growth of small and medium enterprises.

We must acknowledge the role which corporate entities, both in the public and private sector, have played in nurturing SMEs through sub-contracting and ancillarisation. This has been particularly true in industries like automobiles and auto accessories, steel products, machine tools, textiles and apparels, chemicals and pharmaceuticals. The growth of SMEs has also been facilitated by the rejuvenation of artisanal skills and traditional crafts. SMEs have also benefited from the winds of change blowing across our economy as a result of our increasing openness. They have today greater access to global markets and have become part of global supply chains. Consequently, they have also upgraded their own skills, capabilities and technology levels.

I will suggest that we must also recognize the role that public policy has played in enabling the growth of the SME sector. The policy of encouraging small industry, the support given by public financial institutions and the banks and in particular shining example provided by Kamat and the infrastructure provided by states have all contributed to the growth of SMEs. Economists sometimes criticize some of the policies on the grounds that they have discouraged efficiency, employment growth and have contributed to high capital intensity, even in the SME sector. Some of the criticism is probably valid. However, one should not take a narrow economics-oriented view of our SME policy. I believe we must take a wider sociological view. SMEs have proved to be the largest creators of employment opportunities. They account for more than a third of our manufacturing output and more than a third of our exports. They will be the best bet for the future in creating more and more employment opportunities that we need and that are essential if we have to reduce the proportion of our population dependent on agriculture.

SMEs have also contributed to creativity, innovation and dynamism in the industrial sector. They have led to the spread of industrial development across the country and have therefore strengthened the foundations of industrial capitalism. The spread of wealth, its wider dispersal, dispersal of managerial and technical competence, and of learning-by-doing knowledge are very considerable economies which the country has reached through mechanism of SMEs. This should not be under estimated. A large part of the process of urbanization in India is based on the growth and spread of small and medium enterprises.

The time has come for a new leap forward for our SME sector. You must become more globally competitive. You must reduce costs and improve productivity. You must pay greater attention to quality and to the welfare of your employees and workers. International experience shows that it is possible for SMEs to remain globally competitive even in an increasingly integrated global market. In fact, the increasing need for greater customer choice and the move away from mass production of uniform products to small batch production of differentiated products have made SMEs more relevant to the spirit of our times. Technological advances are also in favour of SMEs as smaller scale production becomes more viable.

Our government is committed to the growth of SMEs and to the emergence of new enterprises in India. We have passed the Micro, Small & Medium Enterprises Development Act to promote the growth of SMEs. We have announced a policy package for doubling credit flow to this sector. As our economy grows, new growth opportunities are emerging for SMEs in sectors like defence, civil aviation, tourism, bio-technology and agri-business. Our government is open to new ideas on how we can spread the benefit of industrialization across the country and encourage new enterprises for the sake of more balanced, regional economic development.

I do recognize that market imperfections particularly in access to credit, markets and technology sometimes place small enterprises at a competitive disadvantage vis-à-vis large enterprises. In economic phenomena, the biblical saying "To him that hath shall be given" has unfortunately wide applicability. A sensible policy framework must address the issue of these market imperfections including the fair and unfair competition to which Raghav Behl referred to in his remarks. In particular, our financial system must be adequately sensitive to the capital needs of small enterprises. I will request the Finance Minister to look at possible ways for expanding access to capital - in particular, risk capital - to SMEs. I sincerely hope that the Limited Partnership Bill presently in the Parliament will deal with problems SMEs have to face.The boom in many parts of our IT sector has been a result of its easy access to foreign venture capital. We need much more of that domestically to give a new fillip to SMEs.

We also need a policy regime that can enable SMEs to make a smooth transition to a larger scale without unnecessary impediments. Lack of technological upgradation and shortage of skilled manpower can be constraints on the growth of this sector. Our Vocational Education Mission which will be operationalised soon will address part of this problem. The massive investments we are making in education will certainly relax the labour constraint. I do believe that this Public Private Partnership will also contribute to nation building process.

I do hope that with the growth in the number of enterprises there is also growth in employment opportunities. SMEs should pay attention to the welfare of their workers and take advantage of their smaller size to pursue more employee friendly policies. On our side, we are working on ways and means of providing social security for your workers particularly those in the unorganized sector. This is a solemn commitment.

Let me once again compliment CNBC TV-18 and ICICI Bank for taking this noble initiative to institute these awards. The winners of these awards will be viewed as the new icons of Indian industry. I am sure they will inspire others to better effort. We need national icons in all walks of life. The icons of big industry who have become symbols of creativity and enterprise in India are inspiring others to greater effort. Similarly, the new heroes in the SME sector some of who are present here must inspire professionalism and enterprise by their solid example. They should be symbols of good corporate governance. They should emerge, and it is my prayer, as respected leaders and members of society. I hope these awards will help in contributing to that process. I wish you all success in your noble endeavour."