The Centre is working on next generation reforms for micro, small and medium enterprises (MSMEs) that would include easy registrations, compliances and inspections, to name a few. The move comes at a time when the sector, which is the backbone of the country’s manufacturing and exporting industries and is a major employment creator, is caught in the headwinds of the 50% US tariffs. The move is also in line with the government’s focus on enhancing ease of doing business by lowering the compliance burden.
According to sources, the MSME ministry has been undertaking cluster level surveys to understand problems in the sector. Sources note that most challenges now occur in terms of compliances and return filing and there are several hurdles at the local and state level as well.
Following the cluster level surveys, an interaction is also being planned with stakeholders next month to discuss the challenges and finalise a road map. There is also a need to review norms around imports and value addition that are critical to the MSME ecosystem. Sources said the Prime Minister’s Office and the finance ministry are working along with the MSME ministry on these proposals.
Alongside, a high-level panel led by NITI Aayog Member and former Cabinet Secretary Rajiv Gauba has also firmed up proposals for further reforms for MSMEs that would enable them to focus on doing business and enhancing productivity.
Significantly, representatives from the MSME sector will also be meeting Finance Minister Nirmala Sitharaman on November 12 for pre-Budget consultations. The minister will also hold similar meeting with representatives from manufacturing sector later in the day.
Sources indicated that reforms for the MSME sector, tentatively being called the third-generation reforms, could be unveiled either by the year end or find a place in the Union Budget 2026-27.
As part of the next generation reforms for the goods and services tax, the GST Council has also approved several procedural changes for MSMEs including a simplified registration scheme. Lower GST rates on inputs are also expected to help MSMEs.
