- Staggering utility prices – a deterrent to continue business
- Weather continues to be unkind to farmers
Small and medium enterprises known as SMEs in the country are considered to be the cornerstone of the economy, accounting for around 75% of enterprises, providing close to 45% of the employment and contributing to nearly half of the GDP.
These enterprises are essential for the sustenance of the rural economy, bridge the urban-rural economic disparities and foster entrepreneurship among youth.
Despite all the hype about the role of SMEs and rhetoric to uplift their situation, nothing conspicuous has taken place to improve the standard of these enterprises. Those who had been selling ornaments, souvenirs, sweets, fruit, vegetables or cooked food for years on the roadside are still in the same situation, if not in a worse state, having to endure the harsh weather, hostile market conditions and distressingly high utility prices.
Under normal circumstances an SME is expected to progress to the next level as a manufacturer or an exporter.
This is not the case for many home-based retail enterprises which are unable to overcome the obstacles on the way.
The many taxes on top of the high fuel cost, electricity and borrowing costs are deterrents to progress.
Floods and drought which are frequent today are a nightmare to these entrepreneurs who could neither save nor afford insurance to set off the loss.
R. Sumanachandra, a pot curd seller from Thanamalwila looking dejected, said sales had plummeted so badly that he was having second thoughts of continuing in the business.
“We had to sell curd for a song as customers have reduced the number of pots they used to buy to cover the electricity and ingredient costs. The high cost of production has put many businessmen off the trade. K. Padmawathi, a sweet seller from Moneragala said she had to give up her confectionery business due to the staggering prices of coconuts and treacle.
“We were a country exporting coconuts and had enough nuts for every household. A nut at Rs. 225 drives me nuts,” she said.
The weather has no favourites. Long shower spells or drought are enemies to crops. The weather is a determinant of prices.
Sarath Perera, a greengrocer from Hingurana said he pays double the price for a kilo of certain vegetables, as harvests have been low due to the rains. Farmers incur huge losses more frequently now due to frequent flooding. All is not bad. The sugar factory in Hingurana is in full swing, following a long lull and that was a silver lining to many sugarcane farmers who lost their income due the closure of the factory for many years.
Similar to the Hingurana sugar factory which has commenced producing brown sugar, plans are afoot to revive and recommence operations of enterprises that were closed down.
According to the latest Purchasing Managers Index, manufacturing activities in February had expanded with projections for further expansion in the food and beverage sector during the festive season.
