Federation of Indian Micro and Small & Medium Enterprises (FISME) met Nitin Gadkari, Union Minister for MSME in New Delhi recently. A memorandum of demands and suggestions were submitted.
In the memorandum, it was mentioned that with regard to the Insolvency and Bankruptcy Code (IBC), the rules had been framed only for companies whereas over 97% of the MSME sector were partnerships or proprietorships and had been kept out. The memorandum also highlighted how MSMEs were being crowded out from public procurement through unfair trade practices such as bundling of orders and awarding of turnkey projects to a few large players.
The submitted document raised the plight of MSME suppliers to buyers undergoing Corporate Insolvency Resolution Process (CIRP) under IBC. Notwithstanding the guarantee of the Micro, Small & Medium Enterprises Development (MSMED) Act to ensure timely payment of principal and interest on delayed payments, MSME suppliers could get nothing through CIRP as they were treated as operational creditors and their priority was way below in the waterfall mechanism.
To spur sustainable industrialisation and boost exports, it was suggested to orient the policy focus towards development of medium enterprises or units having economy of scale to withstand global competition. It was mentioned that medium sized enterprises are often ignored and are specifically excluded from most of the support schemes run by the concerned department.
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