Assocham Proposes Centralized Grievances Portal for MSMEs

New Delhi, Nov 28 (PTI) Industry body Assocham on Thursday made a strong case for establishing centralised grievances portal for MSMEs, similar to the Reserve Bank of India's (RBI's) Ombudsman system, to raise issues related to various departments and state governments.

Assocham, in collaboration with Egrow Foundation, conducted an in-depth study on 'MSMEs Facing Challenges in Doing Business'.

By combining quantitative data of over 150 companies from the survey with qualitative feedback from around 120 industry stakeholders, the industry body said the study offered a comprehensive understanding of the multifaceted issues MSMEs faced.

"The report lays out a strategic plan and roadmap for the MSMEs on India's path to become a developed country by 2047... Our strong base of formal and informal entrepreneurs would need strategic support from the government -- Centre and states, banks and conglomerates to be a critical partner in realising the national aspirations," Assocham President Sanjay Nayyar said.

The study also suggested that the corporate income tax rate for MSMEs should be reduced to 15 per cent from 25 per cent, further suggesting a simplified goods and services tax (GST) system to ease procedures for compliance.

Noting that MSMEs face difficulty in lodging complaints and seeking resolutions, the report suggested establishment of a centralised grievances portal similar to the RBI's Ombudsman system.

"This portal would serve as a single platform for MSMEs to raise issues related to various departments and state governments," it said.

It also said there should be a user-friendly online portal for MSME registration, allowing businesses to submit all necessary documents and information electronically.

The report further said the government can streamline the GST registration and compliance process. This includes reducing the frequency of amendments and providing clear guidelines and support to MSMEs.

It further said MSMEs face strict penalties for delays in GST payments or return filings, even when delays are justifiable.

"The government should introduce a tiered penalty structure that takes into account the severity of the delay and the reasons for it. Providing clear guidelines for justifiable delays and offering leniency in such cases can help reduce the financial burden on MSMEs," the report said.

Commenting on the report, Assocham Secretary General Deepak Sood said realising the goal of Viksit Bharat would require structural changes in India's business paradigm.

"MSMEs have to be part of this structural transformation. A developed India would have a vibrant role for the MSMEs. Our study underscores this point emphatically," he said.

EGROW Foundation Founder Charan Singh said MSMEs can address the issue of rising labour force due to demographic dividend and provide productive employment.

"To encourage MSMEs, like setting up the agriculture universities, each state may like to consider having a MSME university to provide support to the products in their state," Singh said.

The report said MSMEs are a cornerstone of India's economy, contributing nearly 30 per cent of GDP, 45 per cent of manufacturing output and 46 per cent of exports in FY24.

The government should establish a dedicated MSME Coordination Council to streamline scheme implementation and address inter-state issues, it added.

Also, developing an MSME Policy Index would provide a valuable tool to measure and improve state-level performance in MSME policy adherence and implementation, it said.