While the ease in the registration process is welcomed by both MSME’s and first-generation entrepreneurs, they are also expecting more relaxation in the continuations of the process in the coming years.
Indian youth today have displayed a much welcomed penchant for starting-up, which has bolstered the existence of MSMEs since 2001, helping the sector become much more organised and advanced. Being a young nation, India is evidently evolving and MSMEs play a pivotal role in this economic renaissance. Emphasising the importance of MSMEs, the government has recently taken a big step by easing out the registration of business processes, also known as ‘Udayam Registration’.
This will boost entrepreneurship in India, motivating first-generation entrepreneurs to register and help in sustaining the ambitious Atmanirbhar Bharat mission. The first five years of every entrepreneur is very crucial and hence easing out in the registration process by the government certainly has taken some load off the shoulders and enabling them to focus more on business resilience and sustainability.
While the ease in the registration process is welcomed by both MSME’s and first-generation entrepreneurs, they are also expecting more relaxation in the continuations of the process in the coming years. Since it’s not a one-time process and needs annual updates like Aadhaar linking, organisational changes, new hiring, or even updating the relocation of the office.
Though this announcement ensures the ease of registration for MSMEs across the nation, one needs to be sure that the following pointers are implemented for smooth functioning:
Even after the announcement, most of the entrepreneurs remain ambiguous about the entire process. The government needs to create an awareness highlighting the importance of Udyam registrations and disseminate information about MSME schemes and their benefits to small scale enterprises, along with know-how of any public procurement policy. Workshops, webinars, and master classes may be conducted with the entrepreneurs based on their sector or geography, to help them understand the benefits associated with the Udhyam registration process. The government should educate the entrepreneurs that by virtue of their registration as an MSME/SSI (‘Small Scale Industries‘) under the MSMED Act, they are entitled to certain benefits like exemption of interest rates on overdrafts, eligibility for industrial promotion subsidy etc.
The restricted and limited access to electricity and internet access in rural areas remains a major impediment in the furthering of MSMEs. As per data from the Ministry of Micro, Small and Medium Enterprises, almost 51% of Indian MSMEs are based in rural areas. Hence a completely digitised registration process needs to be backed by proper training, masterclasses, and workshops to ensure proper communication so it can be executed on ground by the ones who most need it. One major factor here is the ease of use, or in other words the entire registration process needs to be user-friendly. If we consider other apps like Tik Tok or Instagram, one can see that these have easily found their way simply riding on the back of their ease of use. If the MSME digitised process on Udhyam Registration is not as simple as using social media, it might not help the stakeholders. Another consideration should be that the registration process should be available in local dialects, which will make it easier to understand in such rural areas.
India reported 1.16 million cyber security cases in 2020, which is three times more than 2019, as per government data presented in parliament. Quite often, MSMEs feel that uploading their personal documents like Aadhaar or pan card online might make them vulnerable to any kind of cyber threat or lead to theft of their data. This discourages them from online registrations and hence they tend to stay away from doing so by adhering to the long offline processes. The safety of such processes, therefore, needs to be thoroughly communicated to the affected parties and they must be educated with the benefits of it. While the NSDL eGovernance Infrastructure Limited (NSDL eGov), which provides various eGovernance services on behalf of the government to the citizens of the country, is spreading awareness on how customers can register themselves, it is also needs to be fast tracked for the better implementation of the new registration policy and to make the rural entrepreneurs comfortable of adapting the digitised method.
As the government has started focusing on increasing entrepreneurship in the country, it must also be complemented with reforms that allow entrepreneurs to work collectively and leverage a sounding board on which they can rely on for unique challenges, growth modules, advisory, and implementation.
Not only will this encourage and push a new age entrepreneur towards the realisation of his entrepreneurial ambition, but also help the entire entrepreneurial ecosystem with a better understanding of government policies, changing economic space, its impact on diverse industries, and also enable learning from varied experiences.
(The writer is Head, ASCENT Foundation)