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EditorialDo more & quick for MSMEs

Do more & quick for MSMEs

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According to government data, the MSME sector includes nearly 63 million enterprises that contribute 30% of 's GDP, 45% of manufacturing, 40% of exports, and employ over 113 million people.

Notwithstanding the official claim, the of MSMEs  however is not well. According to a recent survey conducted by an industry body – Consortium of Indian Associations, more than three-fourths of micro, small, and medium-sized enterprises (MSMEs) believe their has remained stagnant, decreased, or closed in the last five years. According to the survey of 1,08,500 entrepreneurs held, 76% of respondents are not profitable, and access to bank finance remains a major issue. The MSME respondents, on the other hand, lauded Union measures such as payment compulsion in 45 days and a refund of 95% of performance guarantee for items supplied during the pandemic.

“During the last 5 years, the performance of 72% of the respondents is either stagnant or decreasing or stopped or wound up. Only 28% of respondents confirmed that they are expanding. This is a red flag. “76% of respondents said they are not profitable,” it said.

45 percent of respondents believed that there was no “ease of doing” in starting, running, closing, or changing their lifestyle, while only 21 percent believed that the government adequately supported MSMEs during the Covid-19 pandemic. 87% of respondents thought the Union Budget was disappointing or a big let-down, while the remaining 7% had no opinion.

The MSME respondents, on the other hand, lauded Union Budget measures such as payment compulsion in 45 days and a refund of 95% of performance guarantee for items supplied during the pandemic. “The goal of the survey was to learn about the situation of MSMEs in India, their views on Budget 2023-24, and their unfulfilled requirements,” CIA said in a statement, while advocating for a separate Micro Enterprises Ministry to address specific issues confronting this sector.

Despite the government's claims about the “ease of doing business,” “micro entrepreneurs continue to be governed by complicated and outdated laws and unnecessary compliance burdens,” according to the CIA. Given this, the Association believes the government should reconsider, repeal, or rewrite these laws,” it added. It has also suggested that the government amend the MSME Development Act of 2006 in order to strengthen state facilitation councils and make changes to the GST Act in order to make it more friendly to small businesses.

Around 42% of respondents cited profit margin concerns as one of the most significant challenges for entrepreneurs, while 70% are concerned about delayed payment receipts and 40% are concerned about raw material price and availability. 52% of respondents found statutory compliance difficult, 62% are concerned about demand and order book position, and 38% are concerned about manpower sourcing and employability skills in the youth. The government and policymakers have repeatedly emphasised the importance of increasing MSMEs' contributions in almost every sphere, from exports to GDP. “While the government's vision is admirable, there are some fundamental issues plaguing the entire MSME ecosystem. MSMEs will be unable to achieve exponential growth unless these issues are addressed.

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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