For MSMEs, measures under ease of doing business by government is a long long way to go

Published: August 7, 2019 6:32:13 PM

The ease of doing business should encompass an entire cycle of establishing the business, enabling it to run efficiently as well structuring its growth.

Creating hassles along the way and taking away entrepreneurs’ constructive time will only be a detrimental factor. Image: Reuters

By Manguirish Pai Raikar

In India, the MSME sector has always been one of the most neglected topics in the eyes of our nation’s governing bodies both at the Central as well as at the State level resulting in the lacklustre performance of the sector in its contribution towards overall GDP. However significant changes made by Prime minister Narendra Modi government to tap its potential to the fullest have facilitated the sector to a great extent what the earlier the governments have failed to understand and do. I being a part of this sector for a long time have had the opportunity to observe the modalities and how brilliantly it could shape the building of a nation’s economy.

Still a living hell

I appreciate the fact that the initial hassles in setting up of an MSME unit have been eased but the following set of procedures make the life of an entrepreneur a living hell as he/she is made to run from pillar to post by almost every government official that he has to face subsequently. Right from
getting the land allocation and the clearances associated with it to get a plan approved by the authorities, to obtaining the Occupancy Certificate has become a nightmare. Besides he/she has to obtain two clearances — the Environment clearance and the other from the pollution control board.

The plans have to be separately approved by several departments the Office of the Factory Inspection, the Fire Department and last but not the least the FDA in case of a food or pharmaceutical unit. Besides getting an operating licence from these government agencies and an electrical and water connection is even worst. Every department thinks that the poor MSME entrepreneur is a milking cow and squeezing him is its birthright. All these come under the purview of the State Government.

Expedite clearances

Hence, it is my opinion that construction of a single-window for all clearances or a portal, which can be connected to all the necessary agencies for obtaining approvals, within the stipulated time will resolve all the hassles and difficulties of one who is looking to set up an MSME unit. The application forms should have clarity and no ambiguity or with loopholes enabling manipulation. The central government should intervene and come out with a common portal on the lines of Udhyog Aadhar portal. Other departments like the Labour, ESIC, Provident Fund, Customs, Revenue etc. also need to be streamlined on a par with those mentioned earlier.

There are limited options of raising finances for MSME units and as such one has to rely upon the banks in their coverage area. MSME entrepreneur does not have the luxury of having a battery of specialised consultants at his disposal nor can he afford them and has to face all the relevant government agencies single-handed. Most of the times the long wait in obtaining all the licences and approvals dulls all the initial enthusiasm and zeal put forth by an individual. 

Inspector Raj

The troubles for a beginner do not end on starting the enterprise but only multiply. The much talked about ‘Inspector Raj’ not just still exists for one to know but has further intensified. The so-called inspector torments and squeezes the entrepreneur. Instead of facilitating, guiding and helping him with the compliance, he resumes on an everlasting fault-finding mission. This is precisely the reason why a majority of the units do not want to come under any government purview. As a result either they do not register or if registered, do not expand or upgrade. This deprives us of any possibility of employment as well as revenue generation.

The ease of doing business should encompass an entire cycle of establishing the business, enabling it to run efficiently as well structuring its growth. Creating hassles along the way and taking away entrepreneurs’ constructive time will only be a detrimental factor. Hope the change in the attitude will come in and would set the wheels of progress in motion.

(Manguirish Pai Raikar is the Chairman – MSME at Assocham National Council. Views expressed are the author’s own.)

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