Need to redefine rules and policies governing MSMEs: Rajiv Kale

Kale also urged that the State Level Advisory Board (SLAB) to expand its scope and focus on a wide range of issues.

April 03, 2014 9:50 IST | India Infoline News Service
Rajiv Kale, Special Commissioner of Industries, Government of NCT Delhi,  underlined the need to redefine and elaborate rules and policies governing MSMEs particularly the MSMED Act as these are sketchy at present. The time had come to move from regulatory legislation to a progressive mindset, he added.
Speaking at a FICCI-Confederation of Micro, Small and Medium Enterprises (CMSME) seminar on ‘MSME Prosperity’, organised with a view to empowering  Indian MSMEs and build their competitiveness, Kale proposed that FICCI should take a lead and help in resolving the prevailing issues regarding definition of terms such as supplier and delay and non-payment to MSMEs by large corporates. 
On ease of doing business, Kale said that it was very difficult for the prospective entrepreneurs to enter the business. He suggested that FICCI should walk with the prospective entrepreneurs and experience the journey with them and understand what impacts and hinders their progress. On this note, he announced that for filing Entrepreneur Memorandum –I (EM-I), the government has done away with the requirement from MSMEs to get DPCC clearance and factory license from the concerned authority though it would be required for filing EM-II. 
Kale also urged that the State Level Advisory Board (SLAB) to expand its scope and focus on a wide range of issues.

Jasbir Singh, Zonal General Manager-NCR, National Small Industries Corporation (NSIC), highlighted the initiatives undertaken by NSIC. One of the most important initiatives was that as a nodal agency, NSIC operates a Single Point Registration Scheme under the Government Purchase Programme, wherein the registered Small Scale Industries (SSI) units get purchase preference in government purchase programme, exemption from payment of Earnest Money Deposit and other such benefits.

Sanjay Bhatia, President, FICCI-CMSME and MD, Hindustan Tin Works Pvt Ltd., said that it was imperative to work towards removing the bottlenecks inhibiting the growth of MSMEs so as to enable the sector to respond effectively to challenges. Hence, providing a favourable ecosystem was a necessary part of enabling growth of MSME sector. This in turn required reliable partners who could provide these enterprises with requisite help in scaling up their business and making them competitive for entry into the global value chain.
In his concluding remarks R. Narayan, Vice-President, FICCI CMSME and Founder & CEO, Power2 SME, said that the role of the MSME sector as a development partner of Government in India faces fundamental challenges, including insufficient infrastructure and inadequate access to power and financing. Furthermore, the sector was largely dominated by informal sector. It was imperative for government-led sector development programmes to give a high priority to the development of MSMEs, and promote entrepreneurship and ownership of enterprises, especially among first generation entrepreneurs. 
The Seminar aimed to create awareness about innovative ways of doing business. The Seminar had a session around the advantage of technology to redefine procurement for the SMEs. The session also touched upon bringing about cost reduction through modern technology and the internet. Power2SME educated the participating entrepreneurs about its innovative business model and how it could enable MSMEs to buy raw materials from quality suppliers, at competitive price points, through an online technology. Since raw material costs is one of the primary expenditures of any manufacturing set –up ranging between 75-80% of their cost, this could have a considerable impact on any MSMEs bottom-line. The session helped the MSMEs to understand how they can use modern technology and internet as the medium to reduce their procurement costs and thus reduce their overall cost of goods sold (COGS) to improve profitability.
Insurance is an extremely important component of the MSME’s business. Currently MSMEs do not get quality insurance advice because of the size of their business as well as lack of subject matter experts. The session by ICICI Lombard addressed this issue by apprising the attendees about the cost-effective & useful MSME Insurance services.
Mainstream banks and other financial institutions have typically viewed MSMEs as high-risk investments and have shied away from serving these businesses. More MSMEs are suffering from this noticeably widening gap, which is called the MSME financing gap. The need of the hour is for both the lender and the business to get together and arrive at a mutually beneficial stance. An expert from Religare Finvest shared insights on inclusive SME financing proposition. The company also shared a copy of the guidebook on family managed businesses with all the attendees.
Since marketing has emerged as one of the core challenges for any MSME, especially so in the internet era, a session from a senior spokesperson from VeriSign was designed especially to apprise the MSMEs about the importance of protection of online reputation and use of a .com (dot com) domain that is gaining special significance to increase brand value and revenue/leads. The participants were also given tips on creating effective brand and establishing their own identity via a .com (dot com) website at very minimal cost.

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