Cut compliance burden for SMEs with less than Rs 5 crore turnover: India SME Forum

With the government expecting to begin talks with industry shortly for the Union Budget 2022, the India SME Forum has stated that the compliance procedure for micro, small, and medium-sized firms (MSMEs) should be significantly simplified.

Over 63 million micros, little, and medium-sized enterprises (MSMEs) provide roughly 40% of India’s total exports.

According to the Central Statistics Office, the percentage of MSME Gross Value Added (GVA) in GDP for the years 2018-19 and 2019-20 was 30.5 percent and 30.0 percent, respectively, at current prices (2011-12).

“We would like compliances to get tapered off. Globally, countries are looking at reduced compliance. We should look at equating it with global principles where compliance is drastically reduced for companies up to Rs 5 crore (of turnover),” Vinod Kumar, president, India SME Forum told.

Kumar further stated that micro and small companies must be brought into the web platform and digitised since competition today comes from all over the world, not just the neighbourhood or next-door enterprise.

“Today, any Indian can buy anything from any international e-commerce website and it will get delivered as long as it is within the ambit of the Customs Act or one product at a time. So, we need to enable our SMEs to be able to cater to customers from around the world,” the India SME Forum president said.

He emphasised the importance of e-commerce in promoting MSMEs’ growth and suggested that the government provide incentives for MSMEs to become digital.

“We need to focus more on labor-intensive sectors more to digitize. We need to work on how our SMEs can be more globally competitive,” Kumar stated.