In order to boost MSMEs to enter the formal sector, the government should ensure easy regulations. These regulations will help them in getting bank finance on beneficial terms and conditions.
In order to boost MSMEs to enter the formal sector, the government should ensure easy regulations. These regulations will help them in getting bank finance on beneficial terms and conditions.
MSME Secretary Madhav Lal said, “Absence of conducive regulatory environment and improper implementation of laws are acting as stumbling blocks for the sector to enter into formal segment.”
He further said that it is high time now for the government to simplify the rules and regulations about MSME sector and a proper ecosystem will ensure encouragement to the MSMEs to come into organised space.
“These units, once they get into the organised sector, can enjoy many advantages on the taxation front apart from easy access to credit, which will help in achieving higher growth and improve productivity,” said Lal.
Lal also noted that the informal segment of MSMEs has actually been growing at a rate which is five to eight times faster than the formal segment. However, a whopping 95 per cent of these units are in the unorganised segment, which is a cause of concern.
Lal revealed that the laws made by the local or state authorities are complex and do not take into consideration the requirement of MSMEs, thus keeping the unregistered entities away from the formal segment.
“I don’t think it is the absence of laws but implementation of laws which is a problem. Sometimes local regulations also come into play,” he added.
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