Ease of doing business for MSMEs: Interacting with students in Kota, Rajasthan at a ‘Yuva Shakti Samvad’ programme on Sunday, finance minister Nirmala Sitharaman advised on the critical aspect of failure in entrepreneurship. Responding to a question on key steps to becoming an entrepreneur, Sitharaman said “you need to be ready to close shop if your business doesn’t work out and start a new venture. Closing is not a curse, nobody is going to black mark you on it but be ready to accept closure.” Sitharaman was on a one-day visit to Kota to attend a credit outreach programme to distribute loans to beneficiaries under Pradhan Mantri Swanidhi Yojana and Mudra Yojana.
The finance minister said to be an entrepreneur, the first thing is to be ready to take risks — both financially and also of the core business one wants to do. “Second, familiarise yourself with facilities provided by the government to encash them. Third, understand the competition around you because that is what going to determine how good you are, how cost-effective you are and how good is your product. So you need to understand your competition.”
Also read: Budget 2023: MSMEs tell FM Nirmala Sitharaman how to improve access to bank loans
The minister in response to another question on improving the business environment in the country said ease of doing business is not just a central government’s responsibility but also the states’ because business “after all starts in states”.
Sitharaman said the central government can bring in rules, meaningful regulations, remove many of the burdens and give it as a policy but further down it is the state government which will have to implement it. “Similarly, if you are living in a municipal area, the municipality will also have to understand that they have to be a part of this initiative. So it is different layers of administration and that’s why the central government is engaging with all of them so that this ease continues across the country.”
Also read: Over 15,000 MSMEs shut since FY20; 54% in current fiscal so far: Govt data
Importantly, as many as 15,029 MSMEs were shut down between the financial year 2019-20 and mid-December in the current fiscal, according to the data shared by Minister of State for MSMEs Bhanu Pratap Singh Verma in the Rajya Sabha in December last year. According to the details, 8,232 – 54 per cent of total shutdowns were closed till December 14 in the current financial year itself followed by 6,222 units – 41 per cent closed in FY21. In contrast, the rest 575 units or 3.82 per cent of total closures were shut between FY20 and FY21 (245 in FY20, 155 in FY21 and 330 in FY22).