Lack of financial expertiseĮven as entrepreneurs keep devising new strategies and plan the expansion of their existing business, there are still a large number of entrepreneurs who lack the financial knowledge to steer the business in the right direction. There have been significant changes in terms of registering a new business which has come down to 30 days from 127 days, local entrepreneurs have to still wait and clear 12 procedures to start a business in Mumbai, whereas globally it takes just five procedures on an average. In fact, the time taken by businesses to enforce a contract remains longer, at 1,445 days, than it was 15 years ago (1,420 days). Many times, entrepreneurs are demotivated to start up because of troubles relating to MSME loan, enforcing contracts and dealing with construction permits. Even as India managed to jump places in the World Bank’s Ease of Doing Business index, there are several loopholes in the system that keep businesses on the edge and prevent them from expanding or flourishing. Most start-ups in India face the problem in the initial stages because of too many regulations and approvals. Ease of doing business remains a bottleneck Let us take you through the top challenges that cripple the industry. Although the government has introduced several economic measures in terms of financing, certain gaps remain that prevent the sector from functioning well. The current economic situation is not conducive to small industries as there is restricted liquidity in the system, though the government pumped in stimulus to keep the sector alive.
In view of its significance, the government is expected to provide adequate support to ensure MSMEs’ growth does not get hamstrung at any point, especially in the middle of a pandemic that has brought major global economies to a standstill.Īmong all the sectors, MSMEs were badly hit following the lockdown as industries remained closed for more than two months between March-end and June. There is no denying the fact that our nation’s growth relies considerably on micro, small, and medium enterprises (MSMEs) that contribute significantly to the GDP by generating mass employment in every nook and corner of India. The contribution made by the informal sector to India’s economy is substantial.
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