Institutional entitlements such as fiscal incentives, power connection, purchase preference, technology assistance and other incentives are available only to the registered units.
The manufacturing plan component of the 12th Plan (2012-17) has recommended the setting up of an institutionalised mechanism that would enable central and state governments to better address issues affecting 94 percent of industries in the MSME sector, FISME said in a statement.
The FISME expressed happiness over the Planning Commission accepting its recommendation that a new approach should be adopted to help Indian manufacturing break out of the stagnation that has kept its share in the gross domestic product at a lowly 16 percent for the last two decades.
"A new backbone organisation (BBO) to ensure implementation of the manufacturing plan may lead to policy and institutional reforms that would allow unregistered industrial units in the micro and small sector to join the mainstream and enjoy all entitlements," said Planning Commission Member Arun Maira at a stakeholders' consultation organised by FISME.
"The BBO being developed would enable policy makers to unleash exactly the kind of reforms that micro units need to breathe freely and grow rapidly," Maira added.