Better utilisation of land will bring fixed cost of production: Survey

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The Economic Survey for 2023-24, released on Monday, called for rationalisation of building regulations to boost the country’s manufacturing capacity.

“There is a need to examine and rationalise building regulations to augment manufacturing capacity. Better utilisation of land will bring the fixed cost of production per unit, thus incentivising the entrepreneur to hire more workers as well. Apart from studying international best practices, inter-state comparisons can help states identify best practices and adopt appropriate policies,” the survey said.

The survey further added that the sectors with widely scattered production units, such as textiles and the Micro, Small, and Medium Enterprises (MSME) sector, seek solutions to constraints in supply chain management, market access, and formalisation.

MSMEs are the backbone of the Indian economy, contributing approximately 30 per cent of the country’s gross domestic product (GDP), 45 per cent of manufacturing output, and providing employment to 11 crore of India’s population.

“The government has implemented initiatives and platforms aimed at supporting formalisation, ease of registration and grievance redressal, like the Samadhaan Portal, Sambandh Portal, and Champions Portal, which aid in delayed payment issues, procurement monitoring, and speedy resolution Industry 367 of grievances,” said the survey. 

The survey further highlighted that the share of MSMEs in all-India manufacturing output during the year FY22 was 35.4 per cent. However, Data Dissemination Portal of Directorate General of Commercial Intelligence and Statistics (DGCIS) states that the share of export of MSME-specified products in all-India exports in 2023-24 was 45.7 per cent. 10.30. 

According to the Annual Survey of Unincorporated Sector Enterprises for 2021-22 and 2022-23, the number of unincorporated enterprises in India increased 5.9 per cent during the period of October 2022-September 2023 in comparison to April, 2021-March 2022. 

During the same period, Gross Value Added (GVA) per worker increased from Rs 1,38,207 to Rs 1,41,769 and Gross Value of Output (GVO) per establishment increased from Rs 3,98,304 to Rs 4,63,389. 

“This shows an increased productivity with more efficient use of resources including labour, which is critical for sustained economic growth and competitiveness,” said the Economic Survey. 

“Progressively, easing the compliance requirements with a single-window mechanism for clearances, digitisation of processes and equipping MSMEs to handle these processes with ease of providing grassroots-level facilitation to ensure market access to MSME products and government-industry-academia collaboration to upskill the workforce,” said Economic Survey.