Govt MSME Committee Recommends Steps To Revive Manufacturing | SupportBiz


Govt MSME Committee Recommends Steps To Revive Manufacturing

The government has expressed its concerns about the massive 221% rise in sick MSMEs, with outstanding loans rising by 145%, from Rs 5,233 cr to Rs 12,800 cr, in the period between 2010 and 2013.

New Dellhi: An inter-ministerial committee on accelerating manufacturing in the micro, small and medium enterprise (MSME) sector has made over 60 recommendations covering issues of regulation, finance, infrastructure, technology and markets that affect the different stages of the life cycle of MSMEs, reports the Business Standard.

The committee was set up to address the growing concern about the performance of MSMEs in the short and medium terms. Statistics show that there has been a 221 per cent increase in the number of sick micro and small enterprises between 2010 and 2013, from 77,723 to 249,903 (provisional).

Their outstanding loans have increased by a whopping 145 per cent over this period, from Rs 5,233 crore to Rs 12,800 crore. The report recommends ways of boosting manufacturing in the MSME sector, states the Business Standard.

The report said it was clear that MSMEs individually and collectively lack the advocacy ability enjoyed by larger enterprises on economic and functional issues, and, therefore, are frequently at the receiving end of unexpected actions of other stakeholders, including the state machinery.

“A complex and unfriendly business ecosystem pushes small entrepreneurs towards the informal and unregistered segment, which is growing faster than the organized segment by more than five times, and already accounts for over 95 percent of all MSMEs,” according the report.

The report also suggested that policy makers and administrators in multiple departments of local, state and Central governments must understand the need to create an ecosystem that assists entrepreneurs through the life cycle of creation, growth and closure of enterprises and encourages them to operate in the organized economy. Apart from simplifying processes, the states can allot the plots that are lying vacant in established industrial estates across the country to start-ups that come up with good business plans.