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Number of sick SMEs rose by 221%; concerned Govt. comes out with 60 recommendations
Regulation, finance, infrastructure, technology and market like issues affect Micro, Small and Medium Enterprises at different stages of their life cycle. To solve these issues, an inter-ministerial committee on accelerating manufacturing in the MSME sector has made 60 recommendations.

The committee was set up by the cabinet secretary in the context of the long gestation period in the National Manufacturing Policy introduced by the center in 2011.

The recommendations have come in the backdrop of 221% increase in the number of sick MSMEs between 2010 and 2013 - from 77,723 to 249,903 (provisional). The outstanding loans of sick SMEs have risen by nearly 145% over this period, from Rs 5,233 crore to Rs 12,800 crore, as reported by Business Standard.

Recommending the ways of boosting manufacturing in MSME sector, the report said it was clearly lack of advocacy ability on economic and functional issues. And that is why MSMEs are frequently at the receiving end of unexpected actions of other stakeholders, including the state machinery.

"A complex and unfriendly business ecosystem pushes small entrepreneurs towards the informal and unregistered segment, which is growing faster than the organised segment by more than five times, and already accounts for over 95 percent of all MSMEs," according the report.

This trend must be reversed and policy makers and administrators in multiple departments of local, state and Central governments must understand the need to create an ecosystem to encourage them to operate in the organised economy.


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