MSMEs to Centre: Do not enforce job reservation

Micro, Small and Medium Enterprises (MSMEs) have urged the Centre against enforcing job reservations in the sector.

In its recommendations to the union MSME ministry over the draft Strategic Action Plan for the sector, Indian Industries Association (IIA) has said there had been proposals in the past for enforcing reservations in the sector for absorbing employees belonging to SC/ST/OBC categories.

Despite the fact that over 51 per cent MSME units in India were owned by SC/ST/OBC entrepreneurs, IIA said, adding, the Action Plan should clearly oppose any such movement.

The MSME sector, by virtue of its nature, had been absorbing and will continue absorbing SC/ST/OBC employees more than the proposed stipulated targets. Therefore, enforcing reservations on MSMEs would burden them with ‘unwanted regulation’.

In general, the industry body has demanded lesser regulation and more facilitation by the government. “There is no point in having regulations which are incomprehensible to the very target group,” IIA President Anil Gupta said referring to MSMEs.

He said simplification of labour laws for MSMEs is being talked about for decades now, but nothing concrete had emerged. “Inspector Raj is the biggest worry for the sector as maximum time and energy of MSME entrepreneurs were being spent on dealing with the inspectors. This not only hinders business growth, but is spreading corruption,” he lamented.

Over 92 per cent of MSMEs were self-financed, therefore time-bound assistance to them, including insurance and support during business failure should be addressed in the Plan.

Besides, 390 million people were directly dependent on MSMEs, by way of employees and their families. “Hence to get the sector recognised at par with agriculture for interest rates, loans and waiver of loans should be incorporated in the Plan,” he added.

Since 94 per cent of MSMEs in India were unregistered, IIA recommended the Action Plan should make district industries centre responsible to get all MSMEs registered in the country, update statistics annually and make district-wise, category-wise, block/area-wise contact and other details available on the website.

The Association said, the plan should encourage and nurture entrepreneurship, because the ‘generation next’ of MSME entrepreneurs were shying away from joining family business due to hardships faced in running and sustaining the units.

Meanwhile, it has urged that all recommendations of Prime Minister’s MSME Task Force should be implemented and their status displayed, on the official website.