July , 2018
Some relevant issues on MSME sector
16:33 pm

B.E. Bureau

The new definition of MSME depen-ding on the value of turnover of a business unit is expected to be passed by the parliament in this session. I think it is a welcome approach. It will help business units to get subsidy and other favourable matters in a better way. Definition depen-ding on cost of plant and machinery only is not fit for all. This is because the structures of business units are very diverse. Some units require power subsidy and some may not need that. So, turnover dependent definition of MSME is better. At the same time, there are some ambiguities in the new system. For example, a small unit may climb up to higher scale in course of time. In such a situation there may arise the problem of amount of subsidy. The ambiguities should be clarified in due course. We are also thinking of any change of labour laws in MSME or big business units.

Some of the problems faced by the MSME sector are to be addressed urgently. The foremost is financial problem. Access to proper technology also matters in a big way. Additionally, it is seen that a huge number of business units are family owned businesses. A lot of them are handed over to generation after generation. In this case, the nature of management from one generation handed over to the next differs. At times, business atmosphere suffers gradually the as next generation may not be equipped to modernise the business properly.

Financial management, in many cases, is poor. At times, profit is not reflected in a proper way. This may lead to a weakening balance sheet of the business, which may lead to difficulties in getting financial loan in future. In many cases, one finds a trust deficit between the business organisation and government. It may have a long term impact on the business sector. This should be minimised.

— As told to BE's Kishore Kumar Biswas


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