MSMEs facing Challenges in Doing Business Report released by ASSOCHAM-Egrow

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MSMEs contribute nearly 30% of GDP, 45% of manufacturing output and 46% of exports in fiscal year 2024.
By 2047, manufacturing and services sector are projected to employ 67% of workforce and contribute over 75% of GDP.

MSMEs are essential to global economy constituting 90% of businesses, and contribute 50% of global GDP.
Indian MSME sector is projected to grow to $1 Trillion by 2028.

Delay in registration: Due to cumbersome registration process, and inefficient single window clearance system.
Confusion about Government schemes: Lack of awareness and confusion among schemes, and lack of Centre-State coordination.
- E.g. Complex registration under GST, frequent amendments driving up cost of doing business.
Administrative burden: Due to overlapping documentation for Professional Tax, Contract Labour, Minimum Wages etc. hindering their operations.
Labour issues: Lack of well-defined trial period for new hires, unskilled workers, variation in wages across states, inefficient training centres etc.
Finance issues: Limited access to institutional finance, opaque loan application process and lack of collateral etc. hinders their growth.
Export issues: Inadequate infrastructure, Lack of Environmental, social and governance (ESG) reports by Indian MSMEs impacts exports competitiveness.

Recommendations

Streamline registration through single window clearance with dedicated helpline, and standardized checklist for documents.
Dedicated MSME Coordination Council to streamline scheme implementation, Simplify GST registration, and reduced frequency of amendments.
Workforce management via uniform labour wages, affordable labour insurance schemes, industry aligned vocational training programmes.
Adequate financing, enhance role and reach of MUDRA, develop fintech solutions, and focus on financial literacy.
Strengthening infrastructure and a tailored ESG framework for MSMEs to enhance their cost competitiveness.