PMO, MSME and Finance Ministry drafting reforms to ease compliance burden.
High-level committee proposes 38 changes to simplify rules and processes.
National consultations to conclude by December ahead of year-end reform launch.
The Prime Minister’s Office is working with the MSME industry and finance ministry on steps to reduce the tax and compliance burden of such units and improve their cost-competitiveness, reported Business Standard. The initiatives are expected to be announced by the government by the end of the year.
The exercise is organised in three stages, starting with workshops at the cluster level, moving on to zone-level conferences in seven cities in November, and ending with a national conference later in the year, according to Business Standard.
A high-level committee, led by Rajiv Gauba, Niti Aayog member and former cabinet secretary, has proposed 38 reforms for India's MSME sector, environmental rules, FSSAI, and BIS. According to ET, key proposals include simplifying MSME definitions and compliance, exempting them from CSR, and easing GST returns. The aim is to create a trust-based regulatory framework.
Speaking about the reform package that is being readied for December launch, a government official old Business Standard that the MSME ministry aims to submit its recommendations to the PMO by mid-November, after which the proposals will be reviewed in consultation with the finance ministry.
MSMEs have been asked to provide practical recommendations on marketing, supply chains and logistics, raw material costs, financial and capital costs, regulatory requirements, and quality standards.
The ministry has asked for ideas on how to use innovation, technology and artificial intelligence to boost manufacturing nationwide.
Input is being sought in areas like fund-of-funds mechanisms, technology infrastructure, venture capital funding, industry-grade training, and improved industry-academic ties to increase research and innovation.
In order to help small businesses better protect and commercialise their innovations, suggestions have also been made to enhance the intellectual property regime. These include making the processes for patents, trademarks and geographical indications simpler.
Government Focus on MSME Reforms
The government’s push to reduce regulatory burden on MSMEs aligns with global trends in improving ease of doing business.
According to a 2020 report by the World Bank, countries that simplified their tax and regulatory systems saw a marked increase in MSME activity, fostering job creation and economic resilience.
The report emphasised that small business ecosystems are greatly strengthened by streamlined policies.
