Around 80 per cent of small and medium businesses (SMBs) across India are "insecure" about their future following the first and second Covid wave-induced lockdowns, a survey conducted by the Consortium of Indian Associations (CIA) and its 40 partner SMB associations shows.
The survey covered 81,000 self-employed and micro or small businesses (SMBs) and found 78 per cent of them have not made profit during the last financial year.
"Over the past year, CIA has provided vital suggestions and modifications required on several initiatives taken by the central and state governments for the benefit of MSMEs. As a result, we realised a data-backed survey would help consolidate the feedback from this sector, to bring out the pain points and provide solutions and a way forward to revive the sector," said CIA convenor KE Raghunathan.
The report presented three-pronged ideas, exempt from statutory compliances, protection of SMBs from the high-interest burden and support by giving liberal loans, for the government to adopt in its approach towards SMBs.
To ensure that proper attention is given to the issues specific to this sector, the report suggests there should be a separate SMB ministry for the self-employed and micro/small businesses.
The CIA also proposed the government amend the Micro, Small and Medium Enterprises Development Act, 2006, to strengthen the state facilitation councils.
"Micro Small Enterprises Facilitation Centres should be given more power to conduct proceedings in a transparent and time-bound manner, and enforce payment of the specified interest to the aggrieved MSMEs. The government also needs to make changes in the GST Act to make it SMB friendly," Ravi Sood, General Secretary of Badli Industrial Estate Association said.
As per the report, the law concerning the lands used by industries, especially MSMEs, needs revision as they are not contributing to the growth of the sector. It states that MSMEs should be allowed to hold titles of industrial properties on a free-hold basis so that they can use them for securing loans and other facilities.
And to avoid red-tapism, the requirement to secure a separate factory licence to set up a unit on a government-approved industrial estate should be eliminated.(Edited by Purnima Priyadarsini)
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