Government Seeks Industry Suggestions on Reducing Compliance Burden for MSMEs

ENA MSME 2025-01-15 16:42:35 New Delhi, Jan 15 (KNN) In a major boost to India's Micro, Small, and Medium Enterprises (MSMEs), the Centre has initiated talks on reforms aimed at reducing the regulatory load on these businesses. The discussions, which involve key ministries such as MSME, Corporate Affairs, and Law and Justice, focus on simplifying processes related to registration, mergers, acquisitions, and business closures. The aim is to make it easier for MSMEs to thrive while addressing the sectors significant challenges, including financing difficulties. The MSME sector, which includes over 50 million businesses, contributes around a third of India's annual gross value added (GVA) and provides employment to over 216 million people. With such a large and vital footprint, any efforts to ease operational difficulties are of immense significance. One of the key areas of focus is aligning the Companies Act, 2013, with the MSMED Act, 2006. Currently, there is a disparity in how small companies are defined under the two legislations. While the Companies Act defines small companies based on their paid-up capital and turnover, the MSME Development Act uses investment in plant and machinery as a criterion. The government is also exploring the possibility of decriminalising certain offences for MSMEs, particularly those related to the conduct of independent directors, and reducing compliance costs associated with financial filings. Industry associations have suggested further amendments to make the regulatory environment more MSME-friendly, including relaxing e-form requirements and decriminalising additional offences. Federation of Indian Micro & Small and Medium Enterprises (FISME) have also recommended simplifying compliance requirements related to the appointment of independent directors, women directors, and provisions pertaining to Corporate Social Responsibility (CSR) under the Companies Act. Another proposal on the table is waiving certain audit requirements for micro enterprises, which would help reduce compliance burdens. A pressing issue for many MSMEs is delayed payments, which have long been a roadblock to their financial stability. The discussions have also touched on potential amendments to the Arbitration and Conciliation Act to expedite dispute resolution, aiming to reduce the time taken to enforce arbitral awards in favour of MSMEs. This initiative builds on previous government efforts, including the launch of e-commerce export hubs and enhanced insurance coverage for MSME exporters. These measures reflect the government's commitment to enhancing the global competitiveness of Indias MSME sector, which is critical to the countrys economic growth. (KNN Bureau) 40659 https://knnindia.co.in/news/newsdetails/msme/government-seeks-industry-suggestions-on-reducing-compliance-burden-for-msmes 2025-01-15 16:42:35 knnindia.co.in Government Seeks Industry Suggestions on Reducing Compliance Burden for MSMEs