Union Budget 2020 India | Ease of Doing Business for MSMEs: Lack of affordable industrial space has led micro, small and medium enterprises (MSMEs) to seek help from the government in this year’s budget by providing subsidized access to land. In its budget recommendations to the Finance Minister Nirmala Sitharaman, MSME body Federation of Indian Micro and Small & Medium Enterprises (FISME) has urged for developing industrial space for small businesses that can be offered at affordable rates. “Currently there seems no other way but for the government to consider developing industrial space: bare land, sheds/plug and play infrastructure, either itself or through private players and offer to MSMEs on subsidized rates on medium or long term lease,” the recommendations noted.
Post Land Acquisition Act enactment, the prices of land have made setting of industries unviable in most states, FISME said claiming MSMEs have not benefited from some of the states offering land free or at subsidized rates, while attracting large scale investments. Consequently due to lack of affordable space, “the pipeline of new greenfield industries in MSMEs has dried up to a large extent.”
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Madhya Pradesh, for instance, in October announced a scheme called Madhya Pradesh MSME Protsahan Yojana, 2019 for MSMEs focusing on attracting investment and encouraging job creation among MSMEs in the state. Under the scheme, the government would give 40 per cent grant for setting up businesses in the state along with a provision of acquiring cheap land by providing 70 per cent of employment to locals and representation of STs, SCs, and OBCs.
MSMEs have also sought a minimum of 50 per cent of market development funds to be earmarked for them to boost their exports from the current nearly 50 per cent of the nation’s total exports. They have also asked for appointing a special regulator for logistics including land, rail, air, shipping and ports to set-up clear rules for the same for transparency in the process along with having a grievance redressal mechanism for exporters and importers.