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‘MSMEs Speak Up Now, for Reform Oriented Approach Post Elections’

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With the Election Season coming in, it is the ideal time to express the issues and reflect core demands. MSME sector which is at the front row of policymaking. The sector is known for it’s contribution into the GDP, exports and employment generation.

The MSMEs’ influence on India’s working population has made a huge convincing impact on government and policymakers. However, this is the time when the proper representation of MSMEs is needed to explain the core issues, urge proper and needed support for the prospective leadership.

Last four years we have witnessed great action in terms of policies, schemes and announcements from the top leaders. The flagship announcements from the current government leadership which made headlines and which have involved the MSMEs or the SMEs include, Make In India, Startup India, Collateral Free Loans for MSMEs, Credit Guarantee Fund,  Mudra Scheme and more.

Apart from making the headlines these policy developments also influenced many entrepreneurs and aspiring entrepreneurs to emerge into their respective business streams.

But overall, we must say that MSME reforms are still a road that is less travelled. But, considering the election fever and as an MSME/SME focused platform, we feel that MSME entrepreneurs must come forward with their pain-points which are facing and they must also express their viewpoints for the road ahead.

Recently, one of the Uttar Pradesh’s chapters of Indian Industries Association (IIA) has released their charter of expectations or suggestions for the political parties to include in their party’s manifesto for the growth of MSME sector in the coming years.

In their letter of suggestion written by Faizabad Chapter Chief from IIA, Om Prakash Jaiswal said: “This is the campaign that IIA is running all over India and submitting the letter of suggestions to the candidates who are contesting elections from different parties and different districts of different states.”

The letter also asked for conversion of leasehold industrial lands into freehold not only to solve the problem of availability of land but also to save the entrepreneurs from the torture of Industrial development corporation.

For the inclusion of comprehensive reforms in the power sector, the association said, “Process of cross-subsidy under which one type of consumers are given electricity at cheap rates and another type of consumers are given electricity on high rates should be stopped.”

If the government wants to give electricity at cheap rates to some consumers then it should pay the extra bill from its own treasure, it added.

Chairman of electricity regulatory commission should be retired judicial officers/judges and not the retired officials who have very little information about legal acts, another point raised by the association in the letter of demand.

Fixed charges, minimum charges, and electricity duty are added in Industrial power rates which high electricity bill because of which financial burden increases on MSE. Therefore IIA suggests that all the above-mentioned charges should be waived off and industrialist should be charged on the basis of per unit consumed.

Besides this, it suggested that some discount should be given on development duty levied on industrial lands and the rate of interest on loans up to Rs 2 crore taken by MSME sectors from banks should be equivalent to the housing sector.

In case of non-payment of the remaining amount on time, there should be a law for the payment of the money by facilitation council formed under MSME Act 2006 through land revenue act, IIA recommended.

after a certain age they become incapable of working due to old age and survival becomes difficult for them.

Also, it asked for simplification of GST laws and amendments in labour laws.

IIA said, “Despite several measures taken by all the governments, the MSME sector is still facing various problems like unavailability of land at a reasonable price, high rate of bank loans, increase in cost of production in comparison to large industries and many more.”

According to the annual report 2017-18 of MSME Ministry, there are a total of 633.88 lakh MSMEs out of which 630.52 lakh are micro and 3.31 lakh are small. Large industries are just 4000 in numbers and therefore after agriculture, it is the second largest sector to provide jobs.

Faiz Askari

Faiz is a mediapreneur specialised in Small Business and Technology domain.

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