Assocham Report: Industry body ASSOCHAM has said in its report released on Thursday that barriers like regulatory delays, high compliance costs and lack of ‘single-window’ approval system are preventing the country’s micro, small and medium enterprises (MSMEs) from reaching their true potential.
The report says that to empower the MSME sector, swift and concrete reforms are needed at the state level. According to ASSOCHAM, several regulatory and infrastructural bottlenecks are hindering business activities, including —
- Complex approval and registration processes
- Delay in refund
- Burden of GST and ITC disputes
- Logistic and infrastructure deficiencies
- Power supply problems in West Bengal and Odisha, affecting production
Emphasis on ‘single window system’
It has been said in the report that if digital and time bound approval system is implemented in the states, it will bring a big improvement in the investment environment. Immediate implementation of Single Window Clearance has been recommended, especially in states like West Bengal, Odisha and Andhra Pradesh, as the existing system there is fragmented.
ASSOCHAM has analyzed the situation of these states in its report – Odisha, West Bengal, Maharashtra, Haryana, Andhra Pradesh, Telangana, Kerala, Tamil Nadu, Punjab, Himachal Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttarakhand, Gujarat, Dadra and Nagar Haveli, Goa, Jammu and Kashmir and Madhya Pradesh.
Major recommendations for improvement
The report calls for coordinated reforms between the central and state governments and suggests the following steps —
- Making approval processes simple and transparent
- GST reform and resolution of ITC disputes
- Time bound process of land use change
- Rationalization of labor laws and company rules
- Strengthening logistics hubs, e-way bill system and modern power distribution infrastructure.
Initiative towards empowering MSME
ASSOCHAM has suggested that the government should pay special attention to these areas for MSMEs —
- Skill Development and Technological Innovation
- export promotion
- Increasing awareness of financial schemes and incentives
The report said that if these issues are addressed, the government can create a trustworthy, transparent and efficient business environment, which will give India’s MSME sector a stronger position in global competition.
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