New Delhi, Sept 12 (KNN) To improve the business environment in India, Damodaran Committee has strongly advocated setting up of an 'overarching body' at the national level for MSMEs to coordinate policy formulation and statutory enforcements among various Central Ministries and State Governments.

Lack of coordination among various arms of Government was identified by the Committee a serious cause of concern.

It has recommended that ‘setting up an overarching body at the highest level to identify and address key issues impeding business facilitation and to interface with relevant Ministries and Departments in order to address identified key impediments in a time-bound manner’.

The State Governments and concerned Central Ministries as well as representatives of micro, small and medium enterprises (MSMEs) could be the members of this over-arching body, the report proposed.

Acknowledging the significant role played by MSMEs in the Indian economy, the report contends that "unless their concerns are addressed, many of them would become uneconomical and there would be very few persons willing to venture into this area of business".

The committee has also stressed the need for having modern Insolvency laws for MSMEs to facilitate the winding up of uneconomic units in an orderly fashion. Because 97 per cent of MSMEs are proprietorship firms or partnerships, they do not have an adequate recourse for winding up the business under the Companies Act, it added.

Set up by Ministry of Corporate Affairs to improve India’s ranking in World bank’s ‘Ease of Doing Business’  report in August  2012, the ‘Committee for Reforming the Regulatory Environment for Doing Business in India’ was headed by high profile Former  Chairman of SEBI, M Domadaran. The other members of the committee included Chairman-ITC Chairman, Y C Deveshwar; Director, Tata Sons, Ishaat Hussain; Chairman-Infosys, K V Kamath; Chairman-Mahindra Group, Anand Mahindra; Chairman, Aditya Birla Group, Kumar Mangalam Birla; Vice Chairman, TERI, R K Pachauri, and Secretary General, FISME, Anil Bhardwaj.

While suggesting procedural simplification such as extensive use of  Websites  for  clearances/approvals, ‘Deemed Approval’ provisions and setting up of ‘Facilitation Centres’  to bring in efficiency and transparency, the Committee has made proposal of far reaching consequences.

Its recommendations encompass reforms in legal and regulatory architecture to boost efficacy of regulatory process the cause of major concern of foreign as well as Indian businesses.  (KNN/PC)