State-led reforms, digitised clearances key for MSME growth: Assocham

Industry body Assocham recommends single-window clearances, graded penalties, and simplified filings to reduce red tape and empower MSMEs across states

State-level digitised and time-bound 'Single Window Systems' could transform investment opportunities for micro, small and medium enterprises (MSMEs), which continue to struggle with regulatory delays and high compliance costs, according to industry body the Associated Chambers of Commerce and Industry of India (Assocham).

 

In its second-phase study, Ease of Doing Business in the Indian States, Assocham called for urgent, state-driven reforms to unlock the potential of MSMEs, particularly in states such as West Bengal, Odisha, and Andhra Pradesh, where existing systems function as “multiple windows".

 

"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," said Nirmal Minda, president of Assocham.

 

 

The report further recommended a national overhaul of MSME compliance:

• It highlighted that many MSMEs with limited resources struggle with regular filing under the Companies Act and urged the Centre to move to biennial or triennial filing cycles for registered MSMEs.
• It also recommended introducing a single consolidated annual MSME compliance form combining multiple filings.
• Assocham further highlighted that excessive penalties for late filings discourage informal businesses from registering, recommending a graded penalty structure or waiving fines for the first instance of delay.
• It also suggested exemptions from mandatory audit for smaller enterprises if their turnover and borrowings fall below a prescribed limit.
• It further recommended enhancing power reliability in key states like West Bengal and Odisha and streamlining land conversion processes in states such as Andhra Pradesh and Haryana.
• It also called for rationalisation of approval fees and strengthening of last-mile infrastructure, including electricity, roads, and water.

 

"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 $30 trillion economy by 2047," said Manish Singhal, secretary general of Assocham.

 

The study comes a day after the Union Cabinet approved schemes worth ₹45,060 crore to support exporters, particularly MSMEs, grappling with challenges due to the 50 per cent tariff imposed by the United States (US) on several Indian products.