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Call for Inputs: Draft National Policy for MSMEs
Call for Inputs: Draft National Policy for MSMEs

February 14, 2022

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The Ministry of Micro, Small and Medium Enterprises (MSME) has released a draft National Policy for MSMEs in India for consultation. The policy holds the vision of stimulating efficiency and productivity of MSMEs to generate income, employment and become a part of the domestic and global value chains. 

The Draft policy proposes action areas under 8 headings. Some of the key highlights of these action areas include:

  1. Intergovernmental Roles & Responsibility: develop standard operating procedures for MSMEs, promote R&D activity, support incubation centres to accelerate transfer of technology, develop model bylaws, memorandum and norms for regulation of MSME in accordance with the MSME Amendment Act, 2020, develop State policy on MSME in line with National Policy, creation and activation of State MSME Facilitation Councils, district/local government to ensure speedy provision of basic infrastructure like electricity and water connections, waste management, warehousing etc.
  2. Legislation and Regulatory Framework for MSMEs in India: Each state should have a regulatory system exclusively for MSMEs, under the Insolvency and Bankruptcy Code, 2016 MSME dues should be given priority over all other unsecured payments after settling dues of employees when a company goes into liquidation, need for recognising a comprehensive exit policy for MSMEs etc.
  3. Access to Finance/Financial Assistance for MSMEs: simplification in various loan application formats, using surrogates like personal guarantee, bank statement, GST data, standardized score cards to evaluate credit worthiness of MSME borrowers, build banks’ ability to capture cash flows of MSME borrowers on a regular basis, setting up a Marketing Development Fund etc.
  4. Technology Upgradation/Adaptation: Enable Indian MSMEs to partner with global businesses and evolve to global levels on innovation, adapting new technologies, develop a new institution to encourage technology development and R&D activity in the MSME sector in identified thrust areas, ensure technology linked skill development etc.
  5. Skill Development: Collect and disseminate information on training entities and programmes, district be made the nodal centre for receiving demand for training activity and receiving the information on all training programmes etc.
  6. Knowledge Management: central government to create databases capturing information on all MSMEs, create a cloud-based comprehensive database in the public domain dealing with credit, payments, marketing, procurement, insurance, technologies, training information etc., support for incubation to promote knowledge based innovative ventures, use artificial intelligence to generate useful information to support MSMEs proactively etc.
  7. Ease of Doing Business: simplification of export procedures, designated officer at export terminals to help MSMEs, legal help for MSMEs for drafting contracts, legal formalities etc.
  8. Development of MSME Code: need for adoption of MSME Code which will provide detailed procedure for implementing the MSME Act. The code will bring clarity on the regulatory norms for entry, continuance or exit of MSMEs, documentation and declaration procedures under several regulatory statutes etc. 
  9. Exit code: Align small and medium enterprises with the Fast-Track Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016, set-up an independent Rehabilitation Fund for rehabilitation of sick and MSMEs. 

We are preparing a response for this draft of the National Policy for MSMEs. In this regard, we are requesting your inputs/comments/suggestions on this draft policy by February 18, 2022. Kindly write to garima@nasscom.in and deepak@nasscom.in

 


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Garima Prakash
Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech

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