In the vibrant landscape of India’s economic growth, one name shines brightly as a symbol of vision, determination, and leadership – Ajit Shah. From working in a packaging company to becoming the President of the Sanand Industries Association (SIA), Ajit Shah’s journey has been an inspiring tale of entrepreneurial spirit and community impact. Throughout his remarkable career, he has spearheaded transformative initiatives, championed the cause of MSMEs, and paved the way for a brighter future for the Sanand region.
Ajit Shah’s journey began in 1982 when he started his career in a packaging company with a meager salary of rupees five hundred. He soon realized the potential of this industry and he took a leap of faith in 1984 and founded Auto Corrugated Boxes Pvt Ltd in Vapi. Overcoming financial challenges, he transformed the company from a semi-automatic manufacturing unit to advanced manufacturing method.
His dedication and leadership caught the attention of the business community, and in 2012, Ajit was elected as the Secretary of the Sanand Industrial Association. During his tenure, he witnessed the challenges faced by MSMEs, including a shortage of funds, limited market access, and fierce competition. In 2017, Ajit Shah’s exemplary contributions earned him the position of President of the Sanand Industries Association. As President, he envisions a future where MSMEs thrive with government support, generating employment opportunities and nurturing a new generation of entrepreneurs.
While talking about the challenges the MSME sector faces, Ajit shared, “There are a lot of challenges in front of the MSMEs sector in India and it still needs enough government attention as well as boost so that it thrives like other sectors and more and more entrepreneurs come forward. India is an entrepreneurial nation, especially Gujarat and I can assure you that India will only become the largest economy in the world when Indian MSMEs will progress.”
Funding Hurdles and Growth Struggles of MSMEs
As the President of the Sanand Industries Association, he has been at the forefront of addressing the significant challenges faced by MSMEs in India. One of the most pressing issues highlighted by Shah is the shortage of funds, which impedes the growth of these enterprises. MSMEs often struggle to secure the necessary capital to start and sustain their ventures, hindering their potential for expansion. The lack of sufficient collateral further restricts their access to loans from traditional financial institutions, limiting their growth opportunities and stifling innovation.
The presence of large multinational companies in the region draws skilled workers away from local MSMEs with enticing higher wages, resulting in manpower challenges and operational disruptions for the smaller enterprises. Despite their crucial role in driving economic growth, MSMEs often struggle to garner adequate government support, with regulatory hurdles and complex policies hindering their progress. The intense competition within the sector poses a constant threat to the sustainability and profitability of these small businesses.
Speaking about one such instance, he said, “Manpower is very crucial when it comes to MSMEs and when one multi-national company enters the region, lots of other small scale enterprises suffer due to that. Let’s suppose, with all the government aid and subsidies, a MSME can afford to pay its labor, daily wage of 325, but a multinational company would be ready to pay four hundred rupees and this will fetch a lot of workers who used to work for the small and medium enterprise. Now the company has to again go out and look for such workers. This seventy-five rupees gap is what I am talking about.”
A Call for Collaboration: The Power of MSME Alliances
Ajit Shah emphasizes on the concept of successful implementation of Cluster Manufacturing. In the Indian context, cluster industries have typically involved multiple factory units within a specific region manufacturing the same component or product. This competition often results in smaller profit margins for individual enterprises, limiting their capacity for sustainable growth.
In contrast, China’s approach to cluster manufacturing has been remarkably successful, largely due to the adoption of Cooperative Cluster Manufacturing, a model Ajit Shah sees as instrumental to their progress. Unlike the Indian approach, the Chinese model involves companies collaborating to manufacture a single product, with each enterprise specializing in specific components or aspects of the final product. This collaborative synergy allows for enhanced product quality, streamlined production processes, and reduced costs. By complementing each other’s strengths, these companies benefit from shared expertise and resources, fostering an environment of innovation and efficiency.
“As industrialists, at some point, we have to come together and establish an organization that will provide common facilities to the MSMEs. For instance, if a company requires boilers, washroom facilities, or fire-safety solutions, we will be there to offer them. The issue with many of our country’s industrial parks and facilities is that they are not adequately planned and curated for the long term. There needs to be a visionary approach where MSMEs are given priority and the necessary attention by the government”, he concludes.
In the dynamic landscape of India’s economic growth, Ajit Shah stands as a shining example of visionary leadership and unwavering dedication to the MSME sector. He envisions a future where MSMEs collaborate to specialize in different aspects of a single product, thereby enhancing product quality and efficiency while reducing competition. In the journey towards progress, Ajit Shah’s leadership serves as an inspiration to aspiring entrepreneurs and a proof of the potential that lies within the thriving MSME sector.