Ease of Doing Business for MSMEs: Micro, tiny, and medium enterprises (MSMEs) fuel India’s economy offered the sheer enormity of the tiny enterprise base in the nation. However, a substantially huge quantity of about 6.3 crore MSMEs in India stay – MSMEs all through their existence. The causes are arguably significantly less by likelihood and more by situations such as operating out of income, poor technologies adoption, labour challenges, absence of collateral, and all round bottlenecks about ease of carrying out company. Beyond these challenges, as India observes Small Industry Day to recognise the contribution of tiny scale units to the economy and market them to develop huge, entrepreneurs and sector specialists inform what’s holding MSMEs back in their transformation from tiny to huge.
“Challenges would continue for MSMEs but if something that could help businesses accelerate their growth is direct guidance and handholding with respect to different government processes and regulations. MSME promoters usually are not well aware of rules or terms and conditions. Even a small mistake costs them heavily with penalties,” Vishnu Goel, Founder, MMD Rail Tracks, and President, Haryana Chamber of Commerce and Industries told TheSpuzz Online. He added that promoters attempt to handle anything on their personal but they can’t afford a excellent lawyer or a consultancy or advisory firm and therefore, representatives of respective government departments must guide MSMEs to stay away from errors ahead alternatively of penalising them. While there are make contact with centers or helplines readily available but that does not assistance a great deal, Goel mentioned.
Importantly, the government had in May 2020 launched the MSME grievance redressal platform Champions for challenges around finance, raw supplies, labour, regulatory permissions, etc., and also to seek facts on the readily available government assistance to MSMEs. According to the information shared by the MSME Minister Narayan Rane in the Rajya Sabha in July, from 26,693 complaints resolved as of January 31, 2021, the quantity had grown to 35,562 as of July 15, 2021. The portal “covers many aspects of e-governance including redressal of grievances and handholding of MSMEs,” Rane had mentioned sharing the information.
For Delhi-based Ashok Kumar Agrawal who runs plywood manufacturing firm Vidya Ply & Board, procedural barriers in government processes and the mindset of government officials towards tiny corporations are amongst the most significant impediments in the development of MSMEs into bigger enterprises. For instance, obtaining just an NOC from the fire services division needs a number of visits to the government offices.
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“I had to visit multiple times for a fire NOC. Why can’t the government onboard multiple third parties for this instead of doing it by themself. MSMEs are not able to grow due to poor handling of issues by the government departments and red-tapism. In total, there is a change in the mindset required of government officials who harass MSMEs. It is almost impossible to apply online for such NOCs online. You would be forced for physical visits and pay the money. MSMEs are certainly growth engines for India but these engines are not operating smoothly,” Agrawal, who is also the President of the Indian Industries Association, told TheSpuzz Online.
For tiny corporations to develop huge, one more crucial element is the focus is on competitiveness, brand constructing, and delivering certainty to the company. The information lie in how a brand evolves with its competitors evolving and increasing in the competitive atmosphere. “If a business decides not to pay attention to brand building, it is mostly going to get lost amongst the host of other brands available in the market. The same goes for providing certainty, it is important to build consistency in the way the brand is perceived by the consumers, so that it instills them with the faith and loyalty to trust a brand they have been engaging with, for a while,” Milan Thakkar, CEO, Walplast told TheSpuzz Online. Walplast is India’s third-biggest infrastructure raw material manufacturer that had evolved from an MSME to a huge enterprise in just 17 years.
However, there are MSMEs that choose to stay tiny. Basically, a lot of of them do not want to scale up simply because of the challenges involved in scaling up operations such as elevated compliance burden. “Plethora of rules and regulations faced by large enterprises is one reason for small units to remain small. Because they remain small, they are not able to benefit from the economies of scale while regulations and red-tapism are major drawbacks in scaling up,” Kavita Chacko, Senior Economist, CARE Ratings told TheSpuzz Online.