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by Rajen Kumar

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Focus

MSME Census May be a Futile Exercise

Aug 2009

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The government is working on a census report on the micro, small and medium enterprises in the country in an effort to identify strengths and weaknesses of the sector.

With millions of micro and small units spread everywhere and anywhere across the length and breadth of the country, the on-going census runs the risk of missing out on most of them. What is the basis of the census and criterion adopted is a big question. Who prepared the data of the units to be taken into account? Is the exercise being done amnogst the organised units or units which are registered with the relevant authorities?

According to the MSME Ministry sources, when completed the census will help the Centre in chalking out effective policy initiatives specific to individual sectors to help them tide over the on-going global demand slowdown. “We have conducted a census for MSMEs and we are expecting the results very soon,” MSME secretary Dinesh Rai said at a function in Delhi recently.

The sources say the sector employs about 420 lakh people and contributes around 40% to the country's industrial output and exports. However, according the Economic Survey 2008-09 'due to limited data available on the sector, it was difficult to assess the impact of global slowdown on MSMEs.' The census of MSMEs was started on May 12

SME WORLD recently spoke to a number of MSME units in Delhi and elsewhere and most of them were unaware of any census being undertaken by the ministry. “We have had no visitor to date and we do not know anything about the census,” said an entrepreneur manufacturing shoes in a West Delhi industrial hub.”

“What will this census do to us? We do not think it will be of any use since the slowdown has changed the entire ecnomics. We need fresh marketing back-up as most of our business is lost in the recession,” said another small entrepreneur manufacturing autoparts on the out skirts of Delhi, and added, “we are trying to rebuild our resources and let us hope things turn better now.”

According to MSME Ministry, the census report would provide information on production, raw material, employment, exports, assets, plant and machinery, products and services, net worth, loan taken by enterprises and outstanding debt, besides assessing the sick units under each category.

“Once we have this data, we will be in a position to have more policy initiative in the area,” Rai said.

“The census is not an easy task. There are millions of units which are untouched by any government initiative, banks or financial institution and they do not feature anywhere in any official count,” said President of an industrial area in south India.

According Mr. Rakesh Rastogi, an entrepreneur in Mysore, the census may not give a clear picture of the state of MSMEs as millions of people work at mico level and they hardly avail any facilitiy or pay any taxes. Yet there are many enterprepreneurs who may not declare the correct data. Most of them may be employing 25 people but only ten are registered emplyeess. How the census will account for the actual state of employment is a big question.

However, Mr. Rastogi is hopeful that the census may help the government in knowing the type of units and products manufactured and their tentative turn over.

Service sector ignored

However the on-going census has ignored the service sector which is an important component of the industry. “I don not know why is our government has not realised the important role being played by the service sector. They are treating us as SME but it is only on paper. Service sector is yet unrecognised by and large”, said a practivcing chartered accountant.

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