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Address by Chairman and Managing Director, SIDBI at the Seventh Annual General Meeting held at 3.00 pm on June 18, 2005 at Hotel Gemini Continental, Lucknow
Ladies and Gentlemen, A very good afternoon to all of you ! I take pride in welcoming each one of you at the 7th Annual General Meeting of the shareholders of Small Industries Development Bank of India. At present, the shares of SIDBI are held by 36 esteemed institutions / public sector banks / insurance companies owned or controlled by the Government of India. I would, now, take this opportunity to present before you an overview of the economy, performance of SME sector, important initiatives taken, working results of the Bank for the FY 2005 and problems and prospects.
Economic Environment	As per the estimates of the Gross Domestic Product, the domestic growth is projected to have moderately decelerated to 6.9 percent in 2004-05 from 8.5 percent in 2003-04. The slow down was primarily related to the agricultural sector which got affected by uneven monsoon. In contrast, a sharp revival in the industrial sector and continued strong growth in the services supported the overall growth in the financial year 2004-05. The industrial sector grew by 8.3 percent during 2004-05, higher than the growth of 6.5 percent in the previous year. This was underpinned by strong export growth and healthy demand conditions. Capacity utilization in the manufacturing sector remained high at around 90 percent level. The services sector is estimated to have achieved a growth of 8.6 percent as compared to 8.9 percent in the previous year. The exports in dollar terms increased by around 27 percent, much higher than the 16 percent growth in the previous year. The foreign exchange reserves touched a mark of US$ 142 billion as at end March 2005 from US$ 113 billion at the end of previous year.
Performance of SME Sector	During the FY 2005, the SSI sector is estimated to have recorded a growth of 13.5 percent in output at current prices and 8.1 percent at constant prices. The number of units in the sector are estimated to have increased to 118.59 lakh as at end of March 2005 from 113.95 lakh in the previous year. Employment generation by the sector was at 283 lakh persons as at end March 2005. It is credible to note that the Tenth Five Year Plan has heavily relied upon the sector for employment generation and pump priming an accelerated growth of GDP.
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