Ease of doing business for MSMEs: A parliamentary panel has suggested a separate division for micro enterprises in the MSME ministry for focused initiatives on micro units “as the problems faced by the micro enterprises are different from the problems faced by the small and medium enterprises.” The panel also called for a separate monitoring mechanism in the ministry regarding the implementation of various schemes meant for the micro enterprises which constitute around 99 per cent of the MSME sector.
“A focused handholding is required to boost the micro enterprises to graduate them to small and then to medium enterprises…Micro enterprises centric policies may be framed and implemented to nurture this segment for overall strengthening of MSMEs,” the parliamentary standing committee on industry said in its report presented to the Rajya Sabha in March this year.
“Currently, a company doing a turnover of Rs 1 lakh a month and Rs 20 crore a month are both called an MSME. We offer the same stimulus scheme for a company engaged in running a salon or a transporter or a manufacturer, or an exporter or a training institute. Giving one medicine for all issues makes it impossible to expect any cure unless strong luck saves the patient,” KE Raghunathan, Convenor, CIA had told FE Aspire.
According to the latest data on the Udyam registration portal, out of nearly 1.70 crore MSMEs registered, 96.6 per cent units (1.63 crore) were micro enterprises while only 2.70 per cent units (4.59 lakh) were small businesses and 0.24 per cent units (40,981) were medium enterprises.
The committee, headed by DMK’s Rajya Sabha member Tiruchi Siva, also said it learnt that during the last five years, MSME entrepreneurs, especially self-employed micro entrepreneurs, saw tremendous stress and pressure even as the government is “focused on converting the informal sector into the formal sector, in converting cash handling to digital handling, in converting tax evaders into taxpayers.”
However, this sudden change in policy framework and mode of digital implementation has resulted in the requirement of external assistance and consultancy for micro entrepreneurs due to a lack of knowledge or expertise or equipment which has put them under stress, the panel noted.
Hence, it recommended the MSME ministry to collaborate with various MSME associations to understand the problems faced by micro enterprises and devise a “specific plan” for the redressal of their problems.
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