As the government sets the ball rolling on redefining the thresholds of micro, small and medium enterprises, industry chamber Ficci feels that the new definition should be scientific and compatible with global standards. The issue was discussed at length at the recent MSME Summit 2014, held by Ficci-Confederation of Micro, Small and Medium Enterprises (Ficci-CMSME), in New Delhi. FE was the media partner to this event. Sanjay Bhatia, president, Ficci-CMSME and MD, Hindustan Tin Works Ltd, had an interaction with FE after the event. Excerpts:
The government proposes to review the definition of MSMEs. What could be ideal capital ceilings, or should they be based on staff-size, turnover and the like?
This has been debated at length at the Ficci-CMSME Summit 2014. It is our considered opinion that a solid policy framework is the need of the times. Attempting to have a redefinition of MSMEs just in relation to its size is just a technical argument. The task of a definition should be to facilitate the smooth working of the MSME units, through appropriate legal and institutional structures. Any policy should provide a supporting framework and an enabling environment. Defining should be geared to foster innovation and growth, and sparking the spirit of enterprise that would catch up as an inclusive phenomenon.
The present system of defining MSMEs is unscientific. The definition should emerge as part of a national policy on the sector. This policy should bring out the criteria of definition, as also the modalities of periodic redefinition. The present system of depending on the MSME Act for a redefinition need to go.
In my view a combination of plant & machinery and turnover-based definition for MSMEs does appear to be a recommended option. We also need to align our definition with the definition followed worldwide as global MSMEs are a lot larger than our MSMEs. Our definition makes it difficult to create linkages between our MSMEs and the MSMEs worldwide.
You have mentioned at the summit that the government should attempt to enhance the ease of doing business for MSMEs? What specific proposals you have in this respect?
Some of the important ideas we propose are:
Automation of Entrepreneurs’ Memorandum filing–Entrepreneurs’ memorandum (EM) filing is mandatory for entrepreneurs seeking to register their start-ups (EM-I) and begin operations (EM-II). In most parts of the country, entrepreneurs have no option but to travel to the district industries centres (DICs) to get their EM-I and EM-II forms. Even