New Delhi, July 25 (KNN) The government have been time and again pushing for ease of doing business in the country. Despite introducing a number of reforms for facilitating the same, in reality, it is still not very easy to do business, especially for the Micro, Small and Medium Enterprises (MSMEs), experts opined.

Talking to KNN, Dr. Yerram Raju, Economist and MSME Lead consultant explained the shortcomings with the current set of policies.

Raju said that the current ease of doing business in the country focusses merely on helping the businesses enter, while there is a lot that needs to be addressed in order to facilitate EODB.

Raju said that lack of information is the main problem that the entrepreneur faces while staring a project. There is no appropriate structure regarding who is to be approached for different clearances required in establishing a business.

He further said that the government both at the centre as well as the state announces schemes for MSME entrants from time to time, yet the reach of these schemes remain limited due to lack of information.

Single window clearance is another important concern that needs to be addressed further. While it is true that in many states businesses can easily get a registration done, but when the entrepreneur goes for starting the unit, there are a lot of approvals and licences that it has to obtain, which is contrary to the single window clearance claim.

He also emphasized the need to have an exit policy. Raju informed that from last ten years, different stakeholders have been advocating the need for an exit policy, but so far the government is not able to formulate any such policy that can help in the exit.

“Ease of doing business should also mean ease in exiting business in case the entrepreneur or the unit doesn’t do well” he added.

Commenting upon the Insolvency and bankruptcy code (IBC) that was introduced by the government, Raju said that though IBC is a positive step, but it needs certain revisions.  The current IBC do not cater well to the need of the MSMEs.

While for big firm that opt for IBC, there are provisions of re-entering into the business, the MSME entrepreneurs are treated differently.  Raju informed that once an MSME goes for IBC, the bank closes its door for the MSMEs, thus there is no option for the unit to continue once its issue is resolved.

Also, earlier, organizations including CUTS International and RAND Corporation held discussions comparing nature of business in India and US and highlighted that the Indian ease of doing business is more to do with easing permits and not facilitating reforms on grounds. (KNN/ DA)