India’s credit infrastructure, bankruptcy framework, and payment mechanisms remain crucially handicapped and need to be addressed urgently if MSMEs are to realize their full potential.
With India’s ranking jumping 65 places in the World Bank’s ‘Ease of Doing Business Rankings’ in the last four years, it seems India is finally gaining acceptance as an ideal destination for setting up a business or a manufacturing base. The government has introduced a number of business-oriented reforms and cut red tape in the last few years that have allowed India to climb rapidly and break into the list of top 100 nations. The target from here on is to be a part of the coveted top 50.
While this has been an exceptional feat achieved by a country as large as India, the ease of doing business for MSMEs largely remains elusive. Our credit infrastructure, bankruptcy framework, and payment mechanisms remain crucially handicapped and need to be addressed urgently if India’s MSMEs are to realize their full potential.
India has the largest base of SMEs in the world after China. However, Indian SMEs contribute only 8-10 per cent to the GDP, compared to 60 per cent in China. If we are to make MSMEs a hotbed of entrepreneurial activity, we will have to focus on the concerns of the Indian MSME sector through some well-thought actionable measures.
Source: Financial Express
