Despite MSMEs being most compliant, surprisingly, they are treated as high risk clients: Expert

Panjim, June 28 (KNN) Despite India being  the world’s fastest growing economy and the 10th largest in terms of nominal GDP its MSME sector is far from the provisions  and cooperation  they  ought to receive  from the banking and the other formal microfinance sector, said Manguirish Pai Raiker, MSME Board member and Chief Advisor, World Trade Centre (WTC), Goa.

Raiker told this to KNN citing the facts that SMEs are responsible for 80 per cent of job creation in the country vis-à-vis 50 per cent in the US and 79 per cent in China.

WTC Goa with the support of WTC Mumbai and International Centre Goa recently organized the Make in India series on ‘Microfinance: A Game Changer for Financial Inclusion’.

Complex and time-consuming loan application procedures, procedure delays, record maintenance of the formal financial institutions and financial illiteracy etc. have so far prevented the micro and small enterprises from availing the benefits provided by the banks and the formal microfinance sector.

Talking about  WTC Goa’s initiatives to support MSMEs,  Raiker said, “We on behalf of MSME board of WTC  Goa  have already recommended the state government  to provide  everything  right from registration of  SMEs, taxation bylaws and  tax return formalities  and various MSME operation wings of labour department, pollution control board , electricity department, waterworks department so on and so forth to be brought onboard under  one page on the already  active  Udhyog Aadhar Online  Portal.”

“This recommendation will allow applications and renewal forms, latest important notices and amendments in labour laws or other policy regulations to be immediately uploaded by all these departments listed on the portal. Thus, preventing the undue delay by ‘Babus’ who usually make SMEs move from pillar to post to get even the simplest of their works done,” Raiker explained.

Moreover, the amendment proposed will also help the government in information dissemination and grievance redressal of the MSMEs, he suggested.

Raiker, who is also the Chairman National Council for SME in ASSOCHAM, said, “Despite MSMEs being  most compliant, surprisingly, they are treated as high risk clients, irrespective of the fact that MSMEs are the most innovative, progressive and supplementary forces to the big industry.”

“Government regulations, banks’ norms and funding schemes like those for ‘Start-up India’ giving three year tax holidays, no inspector rush, fund for funds etc if also made available to MSMEs,  can help them do wonders,” he said emphasizing that the 40% of the export business today is in their hands.

“Its high time that India should realize the fact that MSMEs are the future as is regarded in Germany where MSMEs are held in highest esteem and supported in best way possible. They in Germany fall back on the government institutions for R&D. So, India once and for all should also try to replicate the same attitude towards MSMEs,” opined Raiker.

Addressing the event on the same day, A O Kuruvilla, Advisor, WTC Mumbai, said “WTC Goa was established with the aim to promote the MSME sector owing to its crucial role in the country’s GDP, employment generation, etc., and provide an international platform to the local businesses to widen their scope.” (KNN/ GK)