Sections of MSMEs working across multiple states are petitioning the Union government to come up with a single window compliance and registration system, freeing them from the burden of registering for shop and trade licences as per each states’ rules.
Every state has different rules for minimum wages, working hours and for registration, Belgaum Chamber of Commerce and Industry (CCI) president Hemendra Porwal told ET. “In some states, trade and shop licences are perpetual. In others, they have to be renewed every year, or every three years, making it difficult for companies with presences in multiple states to comply,” he said.
MSME rules, he added, should be centrally applied as most of the benefits come from the Centre anyway. “If the competition between the states is reduced, the country as a whole would progress much faster in this aspect,” he said.
An MSME owner, not willing to be named, told ET that the compliance delays and the penalties the company incurred had forced them to shut down operations in neighbouring Maharashtra just after the pandemic. While they are now in a position to restart operations there, the rules have remained unchanged.
About 23.4 million MSMEs are currently registered on the MSME ministry’s UDYAM portal. Maharashtrian enterprises top the list, with about 4 million MSMEs, followed by Tamil Nadu at 2.3 million. Karnataka is sixth on the list with 1.33 registered MSMEs.
The actual number is much higher, Pratik Vaidya, president of the Maharashtra chapter of the SME forum, told ET. Without a single window registration system, most enterprises do not register and they are left out of the many benefits the government has for MSMEs, including collateral free-loans, reservation in government procurement, exemption from having to pay Earnest Money Deposits (EMD) while competing for government tenders, the MD of Karma Management Global Consulting Solutions said.
