States should reduce compliance burden of MSMEs: Eco Survey

New Delhi: India’s micro, small and medium enterprises continue to face “extensive regulation” and compliance requirements, apart from major bottlenecks in access to affordable and timely funding being one of the “core concerns”, the Economic Survey said on Monday.

Asserting that further reduction in the compliance burden for MSMEs will considerably improve their growth prospects, the Survey for 2023-24 tabled in Parliament recommended “progressively easing the compliance requirements with a single-window mechanism for clearances, digitisation of processes and equipping MSMEs to handle these processes with ease”.

It also called for providing grassroots-level facilitation to ensure market access to MSME products. The Survey highlighted that the management bandwidth in MSMEs to grow business, seek new markets, get funding, and hire labour is limited, and this limited bandwidth is spent disproportionately on compliance.

“Whereas the Union government frames the rules, the implementation or supervision is in the hands of Inspectors and Supervisors who come from the relevant departments in the states.