Ease of Doing Business for MSME stands at 67, service sector faces more problems

Overall ease of doing business stands at 64, EODB for manufacturing sector MSMEs was higher compared to the service sector

   
Ease of doing business for MSME

The overall Micro, Small and Medium Enterprises’ Ease of Doing Business (MSME EODB) stands at 64 points out of 100, of which EODB for manufacturing sector MSMEs was higher compared to the service sector, a study released on Tuesday said.

The ‘Ease of Doing Business for MSMEs in India: Percolating EODB Reforms at Factory Level’ study, was carried out by the Research Bureau of the PHD Chamber of Commerce and Industry (PHDCCI) in collaboration with the Department of Commerce, Delhi School of Economics, University of Delhi. It was released by Union Jal Shakti Minister Gajendra Singh Shekhawat.

The study is based on a pan India stratified random sample survey of MSMEs from manufacturing and services sectors, through a structured questionnaire on 25 parameters of EODB. The survey was conducted for the period 2021 and responses of 5,254 MSMEs were received.

“The survey results revealed that the overall MSME EODB stands at 64, of which EODB for manufacturing sector MSMEs stands at 67 and EODB for service sector MSMEs stands at 61,” the report said.

The five top-scoring parameters for ease of doing business of MSMEs include adoption of digitisation, availability of information on business procedures and compliances, processes and procedures for starting a business, adequate power supply availability, and process of tax registration and tax compliance.

On the other hand, the least scoring parameters were government support for marketing, reduction in time taken to obtain credit and reduction in the overall costs of doing business.

The five top-scoring parameters for ease of doing business of manufacturing sector MSMEs include adoption of digitisation, availability of information on business procedures & compliances, adequate power supply availability, the process of tax registration and tax compliance and availability of Infrastructure (internet, telecom and other utility), the report said.

“The least scoring parameters were government support for marketing, reduction in time taken to obtain credit, and reduction in the cost of power,” it added.

According to the survey, the top-scoring parameters for ease of doing business of service sector MSMEs include the availability of information on business procedures & compliances, processes and procedures for starting a business, regulatory environment, dissolution of business and adoption of digitisation.

The least scoring parameters were reduction in the cost of compliance, reduction in time taken to obtain credit, and reduction in the overall costs of doing business.