Urgent State Reforms Needed To Ease MSME Compliance Burden: ASSOCHAM

New Delhi, Nov 14 (KNN) State-level, digitised and time-bound single-window systems could greatly improve investment opportunities for micro, small and medium enterprises (MSMEs), which still face regulatory delays and high compliance costs, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said.

In the second phase of its study, ‘Ease of Doing Business in the Indian States’, Assocham called for urgent, state-led reforms to address persistent bottlenecks faced by MSMEs. 

The chamber noted that in several states—such as West Bengal, Odisha and Andhra Pradesh—existing systems often operate as ‘multiple windows’, undermining efficiency and discouraging investment.

Assocham President Nirmal Minda noted, "While there have been notable policy reforms and simplification of processes such as for goods and services tax (GST) recently, businesses still navigate multiple layers of compliance and approvals.” 

“Assocham is working closely with both central and state governments to identify and implement regulatory and financial reforms," he added, reported Business Standard.

The report proposed a comprehensive national overhaul of MSME compliance norms. 

It noted that many small businesses struggle with frequent filings under the Companies Act and recommended shifting registered MSMEs to biennial or triennial filing cycles. It also called for a single consolidated annual compliance form to replace multiple filings.

Other recommendations included a graded penalty structure or first-instance waiver to address the deterrent effect of high late fees, exemptions from mandatory audits for smaller enterprises below specified turnover and borrowing thresholds, improved power reliability in states such as West Bengal and Odisha, and streamlined land-conversion processes in Andhra Pradesh and Haryana. 

The chamber further urged rationalisation of approval fees and upgraded last-mile infrastructure, including roads, electricity and water.

Assocham Secretary General Manish Singhal said easing regulatory burdens on MSMEs would be central to India’s long-term economic ambitions. 

"India's growth ambitions rest on our ability to make business easier, faster and more predictable for MSMEs. States have a pivotal role in this transformation…Making it easier for MSMEs will be the cornerstone of India's journey to becoming a USD 30 trillion economy by 2047," he said.

The study was released a day after the Union Cabinet cleared schemes worth Rs 45,060 crore to support exporters—particularly MSMEs—coping with challenges arising from the United States’ decision to impose a 50 percent tariff on several Indian products.

(KNN Bureau)