U.K. Sinha committee on Micro, Small and Medium Enterprises (MSME)
Posted on : 25 Dec 2019Views: 1694
- The Reserve Bank has set up an eight-member expert committee under the leadership of the former chairman of SEBI, UK Sinha to review the current framework for the MSME sector.
- The committee has suggested long-term solutions for the economic and financial sustainability of the micro, small and medium enterprises.
Key Recommendations of the Committee
- The Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 may be reimagined as a comprehensive and holistic MSME Code having a provision for sunset on the plethora of complex laws scattered all over the legislative framework.
- Change in the definition of MSMEs from current investment-based to turnover-based definition, as it would be more transparent, progressive, easier to implement. It will also remove the bias towards manufacturing enterprises in the existing definition.
- Strengthening the procurement mechanism by promotion of the Government e-Market (GEM) Portal and improving its payment system.
- State Financial Corporations (SFC) is set up to promote Small Scale Industries and they can be given more operational freedom by the State legislations.
- Khadi and Village Industries Commission (KVIC)- should be corporatized with a focus on promotional work.
- Due to the lack of sophistication on the part of MSMEs, Insolvency code/ delegated legislation should provide for out-of-court assistance to MSMEs such as mediation, financial education, or the appointment of a trustee.
- The performance of Clusters needs to be improved by bringing synergy and coordination within a large number of support schemes.
- Involving local intermediaries such as business membership organizations in developing linkages with other stakeholders such as training, educational and research institutions.
- Market Support for MSMEs can be enhanced by developing networks of development service providers that can provide customized solutions to MSMEs that are struggling with the capability and resource constraints.
- Improving access to technology through a technology Mission for converging the efforts for the technology up-gradation of the MSMEs. Apart from it, more Industry-specific Technology Centres can be opened.
- Set up a National Council for MSMEs under the Chairmanship of the Prime Minister, in order to facilitate coherent policy outlook and unity of monitoring.
Article Related Questions
Recently, the Reserve Bank of India has set up an Expert Committee to review the correct framework for the Micro, Small and Medium Enterprises. Who is the chairman of the committee?
3.V. K. Shunglu
4.U. K. Sinha
Right Ans : U. K. Sinha