Kerala’s MSME Policy Needs Some Fine-tuning
After the current LDF government came to power in May 2016, 45,093 new MSME units have been registered garnering an investment of Rs. 4087 crores and providing employment to 1,58,189 people, according to official records.
Destination Kerala’s SME Excellence Awards will be held on January 11, 2020 celebrating the success of 10 entrepreneurs
The Government of Kerala launched K-SWIFT (Kerala Single Window Interface for Fast & Transparent Clearances) in February 2019 which envisages green lighting applications within 30 days right from village panchayat to State Secretariat. K-SWIFT and its integration with Intelligent Building Planning Management Software (IBPMS) would fast track approvals for setting up new businesses and boost industrial activity.
In November 2019, Government of Kerala passed the MSME Facilitation Bill allowing MSME businesses with investment up to Rs. 10 crores to start functioning and allowing a time limit of 3 years to secure all approvals and licenses.
Leaders of trade bodies however have sounded a word of caution. They feel that after establishing a business in three years, if for any reason the licenses get stuck, then the business will be doomed. Also, many MSME businesses are bank financed. Banks while being proactive to support the sector, maybe wary of investing in businesses without approvals in place.
The K-SWIFT platform continues to have bugs that need immediate fix and only 14 departments are online out of the more than 25 relevant ones. Unless all departments become online, the platform cannot be optimally leveraged. The government has appointed two IT experts in each district to address queries of businesses which is a very good move.
Land and building have always been the ‘insurance’ for entrepreneurs, the hedge against unforeseen bad tidings. However, the sale of land or permission to construct additional floors on MSME buildings within government-run industrial parks is cumbersome. The government has to allow sale of land and construction of multi-story buildings for renting out, on a case-by-case basis when an enterprise fails.
Destination Kerala’s SME Excellence Awards will be held on January 11, 2020 celebrating the success of 10 entrepreneurs.
Wishing you all a very Happy New Year!