India is home to approximately 6.3 crore MSMEs which forms the backbone of the economy. Similar to the first and second wave, the current predicament with the Omicron variant can prove to be dire for MSMEs and their daily functioning. These small businesses can be safeguarded with certain provisions in the Union Budget 2022 which is to be presented in the parliament by the current Finance Minister, Nirmala Sitharaman on 1st February 2022.
To drive implementation around the upliftment and empowerment of MSMEs, the Federation of Indian Micro and Small and Medium Enterprises (FISME), has put forth a number of recommendations which can facilitate ease of doing business for MSMEs in India and create a conducive e-commerce ecosystem.
Treating online and offline sellers alike: India is a home to sellers conducting business using online or offline and in some cases hybrid model uses both platforms. In order to support the sellers and increase adoption of digital mode of business including payment, it is requested to create a unified policy and extend GST threshold limit to online sellers too.
No artificial distinction of essential vs non-essentials: This measure will help in ensuring jobs and continuity of economic activities. One of the officials of the Ministry of MSME has also echoed similar views who was quoted saying: “The distinction between essential and non-essential goods and services sold online could be revisited with focus on the safe delivery to provide a wider online marketplace to MSMEs”.
Plug and Play Model: Cutting down project implementation time and cost by employing the ‘Plug and Play' model giving MSMEs and entrepreneurs a chance to immerse into the practical world of innovation and industrialization.
PPP Approach: Providing quality infrastructure development through public-private partnership (PPP) approach. Development of Information and Communications Technology (ICT) should incorporate the rise of IT in the country into the MSME ecosystem through creation of online portals for formalities, regulatory filings, portal for collaboration amongst various governmental departments, knowledge dissemination, and market promotion for MSMEs. This will enable interaction with global investors and the network of experts assisting the department in implementing its policies.
Single Window System: Strengthening ease of doing business through the introduction of 'Single Window System' for MSMEs by ensuring regulatory clearances, streamlining procedures, rules, and regulations to help businesses grow. Ensuring access to multiple official formalities through a single point of contact.
Reducing the cost, delays, and turnaround time of documentation processes
Increasing authorities' processing efficiencies with streamlined process flow.
Facilitating ‘Ease of Doing Business’ for small sellers: Reducing compliance (GST) burdens and registration norms for online players, would go a long way in enabling digitisation of MSMEs. The regulatory framework should focus on enabling parity between offline and online sellers, encouraging small sellers to join the digital economy and pursue growth.