India’s first digital court, developed by Jupitice Justice Technologies, has now come up with a customized MSME court (Micro, small, and medium-sized business court) to swiftly resolve the rising disputes in the small to mid-level businesses. After making headlines for being the first globally, to help resolve civil and commercial disputes through the private justice delivery mechanism; the MSME Digital court developed by Jupitice is determined to help the SME owners to resolve their commercial disputes through various ADR Mechanism i.e. Arbitration, Conciliation, Mediation among others.

Considered as the accelerator of socio-economic development of the country, the MSME sector has been gaining momentum as it accounted for nearly 30% of India's Gross Domestic Product (GDP) in the financial year 2019. A slew of development schemes have been announced in order to increase the sector’s contribution to GDP to 50%.

However, the sector continues to face multiple challenges, one of which is lack of working capital. Since MSMEs don’t have sufficient security to offer to the bank for raising capital or other alternate ways of raising capital, they continue to work with their limited capital. However, in case of any dispute, the entire capital is bound to get blocked. Therefore, it is imperative that MSMEs have speedy justice given the long time taken in litigation in courts.

Keeping the facts in mind, Jupitice announced the World’s First MSME Digital Court. The AI-driven platform will resolve disputes that include civil, commercial, personal, consumers, etc. under the Private Justice System.

“Jupitice’s MSME Digital Court is a Digital Mirror of Traditional Court with Ultra-Advanced Digital Justice Infrastructure powered by a complete digital justice ecosystem. This means that an out-of-court settlement through ADR mechanism is now possible, that too all online. SME owners or stakeholders won’t have to worry about investing their time, energy, focus, money on resolving disputes via a time-consuming litigation process,” said Mr Raman Aggarwal, Founder and CEO, Jupitice Justice technologies.

Maharashtra MSMEs filed 20,463 applications, of which 8,589 are outstanding, according to the dashboard of MSME Samadhan, a delayed payment-monitoring system. With 6,345 out of 7,864 total, Delhi has the second-highest number of outstanding applications in the country. Pune has the fifth highest pendency rate in the country.

“As a small to mid-level enterprise, getting into a legal suit is probably our worst nightmare. I mean, nobody wants a lawsuit, right? But getting into one means risking our business, capital invested, basically the livelihood of people dependent on companies like us. If there is a way to settle issues or disputes outside of court and if possible, digitally, that would be ideal for all parties,” said a MSME owner.

MSMEs also contribute significantly to job creation, employing around 110 million people across the country. MSMEs are also connected with the rural economy, as more than half of MSMEs operate in India's rural areas. According to survey estimates, the Covid-19 pandemic disrupted MSMEs profits by 20 -50 percent, with micro and small businesses bearing the brunt of the impact, owing to a liquidity crunch.

“The need for an effective use of Alternative Dispute Resolution mechanisms is now more than ever with the on-going pandemic situation. It is high time that people opt for Arbitration or Mediation mechanisms for quicker dispute resolution, especially with ODR in the scene,” said Justice (Retd.) Kshitij R Vyas, Former Chief Justice of Bombay High Court and currently a panelist with Jupitice Justice Technology.

In order to build a better & healthy relationship across businesses for MSMEs, Jupitice is determined to enhance the liquidity of MSMEs by providing fast, cost-Effective & efficient dispute resolution through its Online Dispute Resolution (ODR) platform. It has also been working towards reducing the Litigation Rate and consequently reducing the burden on Judiciary/ Public Justice System.

Low trust & confidence hit Trade Credit Ecosystem: Expert

Trade Credit (TC) which is an integral and known way to make payments in the businesses have been paralysed due to low trust and confidence following COVID-19 pandemic, said B L Chandak, Ex-DGM, SIDBI.

Apart from these, Chandak also said that issues like credit indiscipline which heightened credit risk perception, credit inadequacies, payment crisis on macro-level output, productivity, aggregate credit and banks are of systemic proportion too has affected TC.

''The prime cause for this is systemic disruptions in credit and payment flow in trade credit [TC] network,'' he said.

He further said that banking sector distress is basically a manifestation of interconnectivity-cum-feedback effects of dysfunctional TC adding, ''It is becoming systemic. Unorganised sector is facing the prospect of solvency-liquidity contagion.''

''Any loss of faith in the credit-based payment system results in more cash-based and fewer credit-based transactions. Unprecedented spurt in currency supply despite recession and spurt in digital payments reflects this,'' he added.

Banks supportive measures, higher public expenditure, monetary easing, policy reforms and external fund inflows can’t stimulate growth to the desired levels as ultimately the finance has to travel through the TC network – the prime base of working capital finance.

''Growing deterioration in TC system integrity needs to be handled fast and effectively; else it can lead to chaotic and contagion conditions in both real and financial sectors.'' he asserted.

Chandak further said that for strengthening TC network, trade associations’ role is crucial in reinforcing transactional and environmental trust and generalised credit discipline in TC ecosystem.

The government may accredit select industry associations to work for self-discipline/self-regulation, prompt payment and encourage them to take collective action against TC renegades.

How changes to IBC can help troubled MSME sector?

Govt has enabled a mechanism via an ordinance under which MSMEs can continue operations using the resolution process without needing to shut shop or change management.

The new amendments to the Insolvency and Bankruptcy Code (IBC) are an attempt to save the micro, small and medium enterprises (MSMEs) that have been hit hard by the pandemic and the consequent supply chain disruptions, Ministry of Corporate Affairs Secretary Rajesh Verma told ThePrint in an interview.

“We were concerned about the MSMEs and wanted to ensure that there are alternate frameworks available for companies facing stress. MSMEs are critical to the supply chain and are hit hard due to supply chain disruptions caused by the pandemic. Our aim is to save these micro, small and medium units,” Verma said.

In one of the biggest amendments to the IBC, 2016, notified on 4 April via an ordinance, the Narendra Modi government brought in changes to the way stressed MSMEs can be rescued.

The government enabled a mechanism through which these units could continue operations via the resolution process without needing to shut shop or see a change in management — features that are part of the existent corporate insolvency resolution framework.

The introduction of the new framework comes at a time many small firms have been severely affected by the disruptions caused by the pandemic, including lockdowns and restrictions on people gathering in big numbers in a particular place. There is an expectation that insolvencies among the small firms will see a sharp increase after a year of suspension of the IBC.

As a part of its Covid relief package, the Modi government had announced the suspension of the provisions of the IBC. This effectively meant that lenders could not drag a company to bankruptcy court for any defaults that arose during this period. However, this relief ended in the last week of March, leaving all subsequent defaults open to insolvency proceedings.

‘Aim is to save MSMEs’

Speaking about the changes, Verma said the government wanted to rescue the MSMEs and envisaged “prepack” for this.

He was referring to prepackaged bankruptcy — advance agreement to deal with bankruptcy — which ensures that cases do not reach the NCLT but are resolved beforehand and without management control of the stressed company necessarily changing hands.

The change from a creditor-in-control model to a debtor-in-possession model is a fundamental shift away from the approach that has been followed so far, which forces the promoters of a firm heading towards insolvency to cede control to the creditors.

“The aim is to ensure that the MSMEs continue their operations as going concerns. This will also preserve employment. We have put in place sufficient safeguards as well,” he said.

The ordinance proposes many safeguards to ensure this new resolution framework is not misused. These include the approval of two-thirds of the financial creditors and agreement among 75 per cent of the firm’s shareholders for a stressed promoter (corporate debtor) to continue to run the company.

According to the ordinance, the pre-packaged resolution framework can only be invoked for defaults of up to Rs 1 crore. Further, the resolution process has to be completed within 120 days.

Welcome move, say analysts

Soumitra Majumdar, Partner, J Sagar Associates, said this is a welcome move and is aimed at flexible, timely and viable resolutions while causing the least disruption.

“While modelled on debtor-in-possession approach, it vests significant consent rights to the financial creditors, such that the mechanism cannot be mis-used by errant promoters,” he said in a 5 April note.

He added that the changes retain the “competitive tension” so as to nudge promoters to propose plans with least impairment to rights and claims of creditors.

What comes to mind when you hear of coffee grown and processed in Kenya, clothes made in Turkey or cars made in Germany?

it is the quality of the product or service.

Quality can be described as the degree of excellence. From improving processes, systems, products and services to making sure that the whole organisation is fit and effective, managing quality effectively enhances an organisation’s potential for success. Quality is central to a country’s brand and reputation. It protects organisations against risks, increases their efficiency, boosts profits and makes them sustainable.

On the other hand, failures in quality resulting from poor governance, ineffective assurance and resistance to change can have dire consequences for businesses. Many will remember the reputational crises endured by BP resulting from the Gulf of Mexico oil spill of 2010, and VW emission cheating scandal of 2015. Both companies are dealing with the ramifications to date. The fallout could have been avoided through effective management of the quality of outputs. 

Quality is not just about disaster prevention, but also achieving great results. Today, it is more important than any other time to match one’s services and products to the needs of their customer. As the international business environment becomes increasingly competitive, customers are more and more demanding and discerning about quality.

What comes to mind when you hear of coffee grown and processed in Kenya, clothes made in Turkey or cars made in Germany? I am certain that it is the quality of the product or service.

Quality can be described as the degree of excellence. From improving processes, systems, products and services to making sure that the whole organisation is fit and effective, managing quality effectively enhances an organisation’s potential for success. Quality is central to a country’s brand and reputation. It protects organisations against risks, increases their efficiency, boosts profits and makes them sustainable.

On the other hand, failures in quality resulting from poor governance, ineffective assurance and resistance to change can have dire consequences for businesses. Many will remember the reputational crises endured by BP resulting from the Gulf of Mexico oil spill of 2010, and VW emission cheating scandal of 2015. Both companies are dealing with the ramifications to date. The fallout could have been avoided through effective management of the quality of outputs. 

Quality is not just about disaster prevention, but also achieving great results. Today, it is more important than any other time to match one’s services and products to the needs of their customer. As the international business environment becomes increasingly competitive, customers are more and more demanding and discerning about quality.

India has the capability to become a lower cost producer than China if the industry and the government work together, Maruti Suzuki India Chairman R.C. Bhargava said.

Bhargava presented his ideas on making Indian manufacturing globally competitive at an online dialogue with the country's management leaders organised by All India Management Association (AIMA).

Bhargava argued that the only objective of government policies has to be to increase the competitiveness of Indian industry so that it can make things at the lowest cost and the best quality in the world. "The more the industry can sell, the more jobs will be created in the economy," he said.

He pointed out that Maruti Suzuki produces more cars each year without adding to its workforce, but the increased sales of cars each year create more jobs in the service economy.

Bhargava said that there is fault in the policy thinking that focuses on job creation by each sector instead of job creation in the total economy.

With regard to states reserving jobs in manufacturing for locals, Bhargava said that it is an anti-competitive step.

The LeaderSpeak session, which was 33rd in the series, was moderated by Harsh Pati Singhania, President, AIMA and Vice Chairman and Managing Director, JK Paper Ltd, while Rekha Sethi, Director General, AIMA, anchored the session.

The protection for the MSME sector has been the bane of Indian manufacturing, according to Bhargava. He argued that the MSMEs have to be as globally competitive as the large companies because the supply chain determines overall competitiveness. He said that the government should understand that the small-scale businesses in manufacturing and the services are different animals and must be treated differently by the policymakers.

Indian industry cannot be competitive unless the promoters and managers treat workers as partners, argued Bhargava. He pointed out that Maruti owes its success to explaining to its workers that they will prosper if the company grows and backing that with policies and actions that delivered income and career growth to the employees. He said that Indian workers had been protected and pampered by the government and the courts before 1991 and the managements themselves had made no attempt to educate workers about what they would gain if the company grew.

Indian industry struggles with high cost and low efficiency in every area because of the nature of politics in the country, according to Bhargava. He said that not only the logistics, but India's competitiveness is lower through entire infrastructure because of government control. The cost of finance is also high in India because of government ownership of banks, which results in high lending rates and loss of competitiveness of Indian industry, he added.

The lack of trust between the people and the industry is a major constraint on policymaking, he said, adding that that when people see promoters and their families using companies for their own benefit instead of benefit of all stakeholders, they suspect politicians who support the private sector.

However, he expressed satisfaction with the government for supporting private industry and talking about building trust. "Big industrialists have to win trust. The government cannot do it for them," he said.

^{Surviving the 'New Normal': Indian SMEs And Their Quest To Find the Light Within the Tunnel: Arundhati Mukherjee}Founder and Director, Aaroh. Source: Enterpenur India

^{While COVID-19 has inflicted significant damage on the organized world, several new opportunities for transformation have also emerged. The current situation has provided businesses an opportunity to make an extreme paradigm shift in the way they approach the market, employees and investments in the future. A key change has been in the mindset on equity structure. Businesses have gradually understood that they need to be agile and flexible for survival, in addition to looking for and leveraging opportunities thrown up by adverse conditions.}

^{SMEs play a major role in the economy of the world, more so in India—contributing to the GDP and employing workforce and in a nation which still lives majorly in its hinterland. The increase in the fortunes of the SMEs in India is directly proportional to the growth our country witnesses. It is thus critical for SMEs to adopt pivotal strategies in order to normalize their operations during and post the COVID-19 era.}

^{Equity vs Debt… It’s time SMEs make the right choice}

^{A common scenario which we often witness in India is of large businesses and startups opting for equity as they prefer bringing-in more knowledge in lieu of sharing ownership and profits. Most often, equity investors enter at a low cost and are therefore willing to take risks to get higher return on an otherwise minimal initial investment. A well-managed equity has a history of adding great wealth to an organization as well as to the personal wealth of the entrepreneur. Unfortunately, many negative stories about equity continue to cloud the vision of SMEs, so it is considered a double edged sword.}

^{By simply looking at success stories of organizations, it is a no-brainer to comprehend that the scope for growth and success rates of equity as a source of funds is exponentially higher than that of debt. Debt makes SMEs risk averse and reduces their ability to innovate and grow, which is why SMEs in India need to latch onto the equity model to ensure they are able to launch new offerings and innovative solutions. Ironically, the visibility is lower for failures of debt-heavy models as it is managed within organizations whereas failures in the equity market are rigorously tracked and recorded due to compliance issues and the media interest in listed companies.}

^{A planned and well-managed approach to the market reduces risks and ensures that the enterprise looks attractive to investors. SMEs record better performance when they are not overleveraged and with the business scenario as it is today, overleveraged books can really spell the doom of established organizations.}

^{Optimise performance to adjust to the ‘new normal’}

^{Technology such as AI, CRM, automation, cloud among other innovations coupled with a high performing workforce can really increase revenues per employee metrics. SMEs need to invest in this area in a structured manner to improve the IT infrastructure and not look at it as a dead or high-cost investment. Bringing in professionals at the highest levels will help usher in the required business understanding to implement technology which in turn will be a huge stepping stone to growth. Today with SAAS models and innovative staffing models becoming more acceptable in India, the opportunity to access the ebay technologies and hiring highly qualified professionals and mentors is higher than ever and shouldn’t be missed by SMEs. It can become their single biggest catalyst for growth or their biggest missed opportunity.}

^{Relooking at sales function and evaluating with an open mind}

^{With travel being restricted and the fear of meeting people, more and more organizations are recognizing the need to use the more efficient digital platforms to create their funnels and even take the sales process forward through such funnels. While larger businesses, due to their sheer geographical spread have a history of leveraging digital online meeting platforms; this trend however has not traditionally been adopted by Indian SMEs who have always been inclined towards face to face meetings for both selling and procurement purposes.}

^{Digitization of the process for acquiring new customers has been used by larger companies for years and SMEs are realizing quickly that those models can be adapted for smaller companies as well. Experimenting with different models, using tools like CRM, online calendars, meeting platforms, inside sales, online sales collaterals, microsites and explainer videos have today become popular tools for helping enterprises pivot their customer acquisition process. Organizations adapting quickly, remodeling and reskilling their sales and marketing organizations are coming out as winners.}

^{Brand building for a stronger today and tomorrow}

^{Brand building has traditionally been neglected by SMEs. The need for new customers to trust an organization without meeting them physically means that the organization and its leaders—both need a strong brand. SMEs now need to build a brand to cover all major aspects of their business: access to customers and to investors or financial institutions—leadership brand, investor brand as well as the corporate brand. Building a brand is no longer the prerogative of large enterprises. If SMEs have to survive and grow, they need to build a brand that will ensure that the brand survives through multiple generations of leaders and one that thrives independent of individuals.}

‘Many MSMEs are still unaware of digital impact, they fail to build customer loyalty, retention’

Technology for MSMEs: The Coronavirus crisis and the lockdown was a phase of evolution for various MSME sectors. Digitization opened the gates for many local businesses to strengthen their operations and cope up with these stressful times.

Many tech-based companies are building exclusive tools to support small and medium scale enterprises.

By Alok Bansal

Technology for MSMEs: The increasing affordability of smartphones, rising internet usage, and growing digital media use are shaping the future of MSMEs and startups in India. India is amongst the biggest and fastest developing markets for digital users. As Digital India emerges, one can see a paradigm shift in the conventional ways of business. The small and medium scale enterprises understand the value of digital transformation for business expansion. They believe digital proficiency is vital to set foot in the online market successfully. Needless to say, digitalization has become a critical factor for all enterprises to survive.

Digitization During Pandemic

'Investments in startups, others may perk up as economy likely to hit pre-Covid level in March quarter'

‘Poor leadership can cost 7% of a firm’s turnover, 4% lower revenue growth, lower customer satisfaction’

The Coronavirus crisis and the lockdown was a phase of evolution for various MSME sectors. Digitization opened the gates for many local businesses to strengthen their operations and cope up with these stressful times. To begin with, local grocery stores that functioned traditionally have now embraced the doorstep online delivery trend and use ‘google sheets’ to record received orders and their stock. Further, digital payment modes were adopted to maintain social distancing as customers did not prefer cash payments.

Physically meeting with doctors was a traditional sales process in the pharmacy industry. However, this was replaced overnight by discussions over digital communication channels. This digitalization of sales force has changed their knowledge-base, skills, and execution during the pandemic. Agribusiness chemical distributors are utilizing online networking channels like Facebook and Zoom videos to connect with farmers in rural areas. Lastly, digital resources played a tremendous role in the education sector to provide classes and training to students online. Hence, many of the technologies became integral to these businesses. With the surge of technology and the prevailing Covid-19 dilemma, the future of the Indian economy will have everything to do with digitalization. No doubt, Indian startups, and MSMEs have perceived that technology can be a pivotal aspect for their ventures and even to bounce back post-pandemic.

Key Factors for Digital Transformation of MSMEs and Startups

MSMEs and Startups can make better decisions with the help of data analytics and business intelligence as they offer a more in-depth insight into consumer journeys. The acquired details help to gauge and foresee client needs. Further, with the rise of cloud-based solutions and freemium models of these services, businesses can create systems that can improve the customer experience. Besides, companies can produce new products or services that meet customer demands. It also advances the delivery process of the right products at the right time that too at a moderate price range. All these factors boost customer engagement for their business that is key for any enterprise to thrive.

Challenges to Overcome

Nevertheless, Indian MSMEs also have to clear some roadblocks to sustain on the path of digital transformation. The current challenges are:

MSMEs have limited growth capital that makes technology adoption and digital transformation demanding.

Buying the latest smart devices, best internet services, and retaining skilled employees to manage digital systems is also an expensive affair for them.

There are still many small and medium scale enterprises who are unaware of the impact of digital transformation and fail to build customer loyalty and retention as other e-businesses.

MSMEs are resistant to augment digital technologies because cutting-edge technologies evolve faster, and they sometimes may not be able to match up with that advancement.

Storing, analyzing, and managing crucial structured and unstructured data to make business decisions is challenging for MSMEs.

Data, cloud, and system management along with the training required to handle them, leave MSMEs uncertain.

Tackling the Problem

To make good use of digital transformation, micro-businesses today are taking help from tech-based start-ups. Their vision is acclimatizing the MSME segment with the digital world. Building a full digital ecosystem and rendering the best support will promote Indian MSMEs towards successful digitalization. From aiding Kirana stores to deliver grocery items through online channels to facilitate the building and launch of e-stores, these startups are providing all kinds of digital services and easing the digital transformation for MSMEs.

Exclusively Developed Tools

Many tech-based companies are building exclusive tools to support small and medium scale enterprises. These tools can enhance the business proficiency and profitability for these small and mid-sized companies. For instance, Google Advantage, an initiative by Google India facilitates MSMEs to use the growing online clientele base. Then there is Google My Business specifically developed to support startups, and MSMEs in India to succeed virtually. These tools are great free resources to create and restore the business data on Google Maps, Search, and Google+ in Hindi as well as English.

The users today necessitate things to be quick and free of errors. It is nearly impossible to deal with all the customers through manual processes smoothly. Digitalization will therefore prove to be the game-changer. Any job, whether small or big, gets easy to accomplish with the help of technology. Moreover, the core aspect of any business, that is, decision making becomes seamless when organizations have the right data accessible at the right moment. For an MSME or startup to flourish today, it must accept digitalization with open arms. Advanced technologies, including AI, data science, IoT, Blockchain, cloud computing, robots, and the development of new business models, will extensively transform the business models of Indian MSMEs and startups. Digitally transforming enterprises are the potential flag-bearers of the future.

The export of labour intensive segments dominated by MSMEs has registered a sharp decline during Apr-Aug 2020 quarter compared to corresponding quarter last year.

The contraction on export front has been to the tune of 47% in Readymade garments, 53% in Leather and 62% in Gems and Jewellery sector when compared quarter to quarter of 2019 and 2020. 

All manufacture goods have witnessed a secular downward trend with the exception of pharmaceuticals which registered a growth of 13% with corresponding period. 

The analysis put forward by Care Ratings, the outliers product categories where positive growth is seen are iron ore (54%), rice (25%), fruits & vegetables (6%).    

According to the report, there has been an over 40% decline in India’s exports to each of its main export destination i.e. Africa, America, Europe and Asia. 

The fall in exports to Europe has been the sharpest. Exports to Europe that account for nearly 20% of the country’s exports has fallen by 48% lower in April-July’20 v/s that in April-July’19. In case of America the decline has been 44% and that to Asia 40%.

B2B digital platform SOLV has rolled out a MSME segment focused Credit Card, in partnership with Standard Chartered Bank. Through the Credit Card, MSME clients would be able to meet business expenses such as supplier payments, fuel, logistics, purchase of raw material, utility payments and others working capital outlays whilst also using the SOLV platform to trade goods, the company said in a statement.

SOLV said the product was rolled out in line with the cashflow issues MSMEs were facing amidst the COVID-19 led slowdown, adding that the product was “unique in its timing and host of customisation that allows for short-term revolving credit availability for small businesses.”

MSME clients would not be charged with any joining fees whilst applying for hte Credit Card, which also provided users with cashback and reward features tailored for the use of businesses such as a 5% cashback on fuel transactions which would effectively make more than two litres of petrol free on a fuel spend of Rs. 4000 every month. “Additionally, micro & small businesses can strengthen their digital credibility, which is fast becoming a must-have for success in the current business environment,” said SOLV.

TDS relief expected for MSMEs transacting through e-commerce platforms  

Delhi : The government is considering provision of relief to micro, small and medium enterprises (MSMEs) hit by the Covid-19 pandemic, sparing them from a 1% tax on gross sales through e-commerce platforms, which takes effect on October 1, officials said. 

The tax exemption limit could be increased from the existing Rs 5 lakh for small businesses. The tax deducted at source (TDS) mechanism would continue to check tax evasion by entities using e-commerce platforms to sell goods and services, two officials working in different ministries said, requesting anonymity. “The provision has been introduced in the Budget 2020-21 to make e-commerce transactions tax-compliant. Hence it has a clause related to PAN [permanent account number] or Aadhaar number,” one of the officials said. 

Finance minister Nirmala Sitharaman, in her budget speech on February 1, 2020 introduced a TDS mechanism for e-commerce transactions. “In order to widen and deepen the tax net, it is proposed to provide that e-commerce operators shall deduct TDS on all payments or credits to e-commerce participants at the rate of 1% in PAN/Aadhaar cases and 5% in non-PAN/Aadhaar cases,” she said.

New Delhi, Sept 19 The COVID-19 pandemic has driven digital transformation of Micro, Small and Medium Enterprises (MSMEs) in India, as these businesses are now adopting technology for business continuity and growth. The same can be confirmed from a study by Tally Solutions which encapsulates how MSMEs embraced technology and handled business operations to come out resilient and ensure business stability. As per the study, 94 per cent business owners state that adopting technology (IT Infrastructure) helped their business operations during lockdown while 67 per cent respondents from West adopted a full-fledged IT infrastructure in their business post lockdown as compared to just 29 per cent during lockdown. Similarly, 60 per cent respondents from South adopted a complete IT infrastructure post lockdown as compared to only 24 per cent during lockdown. The study also highlights that 82 per cent of small businesses are optimistic about the outlook of business continuity with current cash flow getting better, allowing 66 per cent of them to pay salaries on time after Unlock 3.0. ''During lockdown 38 per cent of businesses were not operating at all, while 35 per cent of businesses were operating daily with limited hours and only 23 per cent of businesses operated with regular hours,'' claimed the study. While post lockdown 48 per cent of businesses operated daily with limited hours and 38 per cent operated with regular hours. Only 5 per cent businesses are unable to operate, the report said. “Despite being one of the most adversely impacted sectors, the MSMEs have shown immense resilience and dynamism to overcome this situation through innovation and adaptability. Not only have these businesses ensured sustenance but also shown great moral character by supporting their employees during this time. Their unwavering spirit is an example for us all to follow in the times of adversity,” said Joyce Ray, Head- India Business, Tally Solutions said. Digital adoption is essential for businesses to leverage opportunities and accelerate business. While MSMEs continue to work towards reaching normalcy, to bounce back stronger they must adopt the right technology tools and business management solutions. This will lead to streamlined operations, enabling remote work capabilities, optimizing expenses, and better cash and inventory management – all resulting in business sustenance and growth.

Small Industries Development Bank of India (SIDBI), the principal financial institution engaged in the promotion, financing and development of Micro, Small and Medium Enterprises (MSME), has entered a Memorandum of Understanding (MoU) with the Rajasthan government to develop the MSME ecosystem in the State.

The MoU was signed by Archana Singh, IAS, Commissioner Industries, Government of Rajasthan and Balbir Singh, General Manager, SIDBI in the presence of Parsadi Lal Meena, Cabinet Minister for Industries and State Enterprises, Government of Rajasthan andShri Naresh Pal Gangwar, IAS, Principal Secretary, Industries and MSME, Government of Rajasthan. 

Under the agreement, a Project Management Unit (PMU) will be deployed by SIDBI with the Government of Rajasthan. The role of the PMU will be to design schemes/programs in the areas of equity support, interest subvention, resolution of stressed MSMEs, supporting MSME entrepreneurs and facilitate other need-based intervention based on evaluation of the existing status of MSMEs. 

On this occasion, V Satya Venkata Rao, Deputy Managing Director of SIDBI said, “We have already initiated the process of collaborating with state governments for more focused engagement in various forms for the upliftment of MSMEs. We have appointed an expert agency for setting up PMUs in 11 states namely, Assam, New Delhi, Haryana, Rajasthan, Uttar Pradesh, Uttarakhand, Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu in the pilot phase. 

With this SIDBI intends to cooperate closely with state governments to strengthen the enterprise ecosystem with thrust on Micro and Small enterprises. Imbibing good practices, rejuvenating existing programs and policies, and enable more responsive ecosystem shall be the target of our joining of hands.” 

“We are set up to empower MSMEs in the State of Rajasthan. The PMU will study existing framework of schemes, interventions, initiatives, projects etc. which are currently available for the benefit of / targeted towards MSMEs in the State and shall suggest modifications, if any, with the objective of enhancing efficacy and removal of bottlenecks,” said Balbir Singh, General Manager, SIDBI. 

This developmental initiative is aligned to expectations laid down in the UK Sinha Committee on MSMEs set up by RBI. It envisions more focused engagement of SIDBI with State Governments for MSME promotion & development. The PMU will also prepare the process for handholding MSMEs in the State for their on boarding onto digital platforms such as PSBLoansIn59Minutes, Stock Exchange listing, e-commerce platforms such as Government e-Marketplace etc. Along with that, the PMU will also engage in mapping repositories of good practices and guidelines both within and outside the State and facilitate adoption of good practices. It will create a framework for evaluating the impact of interventions being made for the benefit of MSMEs and shall also provide inputs for policy advocacy.

In another major step towards payment of MSME dues by different sectors, Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has now impressed upon the private sector enterprises of the country to take measures for release of payment of MSME dues on priority.

During the announcement of AtmaNirbhar Package, it was desired that the MSME receivables and dues should be paid in 45 days. Accordingly Ministry of MSME took up the matter aggressively with Central Ministries, their departments and Central Public Sector Enterprises (CPSEs). In addition to writing and following up with them,  

Ministry has also devised an online system for reporting. Hundreds of CPSEs have been reporting on this system about the monthly dues and payments since last four months. Around Rs. 10000 crores have been reported to have been paid by the Ministries and CPSEs. Similarly, Ministry has also taken up the issue with States and motivated them to monitor and see that such payments are made expeditiously.

The Federation of Indian Export Organisations (FIEO) has said that MSME exporters are facing huge liquidity challenges due to the stoppage of MEIS benefits of over Rs 10,000 crore from April 1 and IGST refunds.

The Merchandise Export from India Scheme (MEIS), introduced in April 2015, will be wound up by December 31, 2020, and the government has already announced the Remission of Duty or Taxes on Export Products (RoDTEP) scheme to replace MEIS. 

''Despite the pandemic, Indian exporters have started receiving a lot of enquiries and orders from across the globe helping many sectors to show improved export performance, which is likely to get better in next few months. However, exporters, particularly from MSME sector, are facing huge liquidity challenges due to the stoppage of MEIS benefits of over Rs 10,000 crore from 1.4.2020 and IGST refund now,'' said FIEO president Sharad Kumar Saraf on Monday. 

''At this point of time when exporters are receiving new orders from new buyers and destinations, support needs to be given to help them to execute such orders. Unfortunately, many of the exporters have expressed their inability to honour such orders, in view of liquidity challenges, due to stoppage of exports benefits and refund of GST,'' he added. 

Saraf urged the government to look into the issue as any letup in our export efforts, at this juncture, will cost us dearly while successful execution of these orders will bring additional export business from new and unexplored territories. 

''All wings of the government should sit together to resolve the technical and financial issues, helping the seamless flow of liquidity to the exports sector,'' opined Saraf. 

FIEO president also said that banks are helping eligible exporters with the Emergency Credit Line Guarantee Scheme (ECLGS) but due to hold up of GST refund and MEIS, the exporters are forced to seek additional loans from banks and such additional requirement is now subject to very high interest rates. Banks need to consider this pragmatically and provide a competitive interest rate to the exports sector particularly as the deposit rates have come down substantially with the reduction in key interest rate. 

''The government needs to pay interest on the delay in refunding GST to compensate the exporters,'' he added. 

FIEO also urged the government to address the issue of Risky Exporters by providing them duty drawback and IGST benefits against a bond, if physical verification of such exporters has been established. The SOP issued for risky exporters may be meticulously followed so that after due verification, exporters are taken out from the category immediately. 

Saraf exuded confidence that export performance is improving and with due support from all the stakeholders, we can bring exports back on track by the end of the year.

India’s premier R&D institution Bhabha Atomic Research Centre (BARC) has developed a range of technologies suitable for deployment by Micro and Small & Medium Enterprises (MSMEs).

The technology spinoffs in BARC are being offered under Advanced Knowledge and Rural Technology Implementation (AKRUTI) scheme. 

The technologies on offer include Domestic Water Purifier, Nano-composite Ultrafiltration Membrane Device for domestic drinking water purification 

Process for enhancing shelf life of Litchi; Tissue culture technologies for turmeric & banana;   

Micro fine Neem Biopesticide; Instant Fish Soup Powder, Nisargruna Biogas Plant based on biodegradable waste (1TPD); Rapid composting technology for decomposition of Dry Leaves, Kitchen waste and Temple waste; Solar Energy driven Portable Domestic Brackish Water Reverse Osmosis Technology; Soil Organic Carbon Detection & Testing Kit; Solar Dryer/ Foldable Solar Dryer among others. 

BARC is licensing these technologies for a moderate fee Rs. 1250 to Rs 25000. Women Entrepreneurs (WEs) are further encouraged by providing additional 10% concession on ATP license fee with other conditions remaining same. 

Under the AKRUTI Tech Plus (ATP) is made of optional fifteen technologies and three consultancy services. 

Details of technologies and application process is available at: http://www.barc.gov.in/akruti-tp/index.html