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Panel suggests flexible labour laws to boost SME sector

Tags: MSME, IMC, Madhav lal, labour laws, India, SME, cabinet

November 19, 2013 | COMMENTS ( 0 )

Panel suggests flexible labour laws to boost SME sector

The inter-ministerial committee (IMC), headed by Micro, Small and Medium Enterprises (MSME) Secretary Madhav Lal, has submitted its report to Cabinet Secretary Ajit Kumar Seth that suggested flexible labour laws and simplified taxation system, among other things, to improve manufacturing in SME sector.

 


The panel was set up to look into issues faced by MSME units and suggest ways to boost manufacturing in the sector. Besides flexible labour laws, the committee also suggested ensuring easy flow of credit to the sector, simplified taxation system, improved infrastructure and effective marketing techniques for improving manufacturing activities in the sector, a senior official said.

 


The MSME sector has been witnessing a slow growth phase with its share of exports falling from 40 percent to 36 percent in the last two years, official said. Also, exiting unviable units is a cumbersome procedure for entrepreneurs as the existing insolvency laws do not support them.
 

 

The MSME Ministry, however, expects that the trend would change if necessary steps are initiated.  The share of MSMEs is targeted to increase up to 50 percent in the country's total exports during the 12th Plan (2012-17).
 

 

The MSME sector contributes over 8 percent to India's GDP and accounts for 45 percent of manufacturing sector. There are about 3.6 crore such MSMEs, employing over 8 crore people.
 

 

The country's manufacturing sector, which constitutes over 75 percent of the index of industrial production (IIP), grew meagre by 0.6 percent in September as against a decline of 1.6 percent a year ago.
 

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