- By Manguirish Pai Raikar
Ease of Doing Business for MSMEs: Lockdown has paralyzed the economy totally. Everyone is worried about his own safety and has preferred to stay home. Even the migrant laborers have returned home. This Covid pandemic has created panic all around. Never before such a condition has occurred nor people have been forced to remain without work. It has been a very difficult situation for daily wage workers, hawkers, utility service personnel and many others who survive on their daily income as the resources have been drying after more than forty days without any work. Government has tried to provide ration to migrants and daily earners, besides charitable institutions have been supportive in some of the areas.
The revival of the economy will be a big issue in coming times. 2020 seems to be the year of survival. Leave aside earning for posterity. Opening of the industrial sector and business enterprises may ease the situation to some extent but to normalize it will be a long way to go. In the current scenario with the money in hand becoming scarce, the tendency would be to purchase only the essential items. The value-added goods like the automobiles, white goods, luxury items etc. will not be on the priority. Therefore the majority of the businesses will still be struggling to find buyers. Real estate market will also try to find its feet on the ground. Banks and other financial institutions will have to play a very significant role in the coming years. There may not be income but enabling rotation of economy will be the major criteria.
Kim Woo-choong’s book “Every street is paved with gold” personifies the drive and imagination that makes development and growth happen. He makes a mention that when the economy goes downhill prepare and be ready with the plan to climb the ladder of success. It is said that we can overcome the disaster only if we open the wings and prepare to fly. We need to see the rays of hope and strains of opportunities. There is a flight of industry from China besides the requirement of products from different parts of the world. We need to seize this opportunity and try to capitalize on it. There is potential in India to start manufacturing the world’s requirements as also to bring in foreign direct investment to make it happen. Make in India can leap forward if we fully apply our energy in this direction. We need to have our system in place and take proactive action. Federal and state synergy should be visible, giving a picture of solidarity to the investor. The confidence of the entrepreneur will be strengthened enabling him to reach a conclusion in finalizing his/her destination.
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Investments at this stage will help in reviving the economy faster and more importantly generate employment which is the need of the hour. Both the centre and the state governments will have to work in tandem to simplify the processes of business implementation and enable ease of doing business in the true sense by cutting all the red-tapism and eliminating corruption. The response has to be quick and the necessary infrastructure will have to be provided. Logistics and utility services will be the key in attracting the investments and due importance will have to be given to it along with the manufacturing. There has to be space for ancillaries and support systems. The work in this direction will have to be fast-paced to be ready for welcoming the new investments.
There are many opportunities like creating new operating areas. There are new corridors being constructed to connect the metros. These roads would be passing through new areas. These areas could be developed as import substitute zones, export promotion zones or simply the next-gen industrial zones with special incentives related to innovative technology, exports and employment generation. This would stimulate the new entrepreneurs as well as foreign direct investment. All the government services like clearances, issuing licenses, approvals etc. should be online and time-bound. The onus of delay should be on the officer concerned and be made liable for payment of damages for causing delays. This would save time and make the implementation of the project quick. Our credibility factor will be enhanced leading to more investments.
Industry and industrial associations will be more than happy to associate and promote such a concept if properly worked out by the government. There should be no ambiguity in the framework and most importantly, there should not be any controls left with the individuals. A task force should be created with bureaucrats and industry representatives to promote new investments, facilitate and handhold them for at least one year. It will be easy to introduce labour reforms in these new areas along with changes in the Factories Act. Let this opportunity entail our country’s economy to $5 trillion as is the dream of our Prime Minister.
Manguirish Pai Raikar is the Chairman – MSME at Assocham National Council. Views expressed are the author’s own.