 "Small enterprises should also get their due: Balram Narula")
The Uttar Pradesh government is keen to promote industry and attract investment, and has been announcing sops and rebates. The state's small and medium entrepreneurs have been demanding more rebates and facilities, emphasising that they should be accorded the same priority as the big industrialists, and their problem should be resolved. Lucknow entrepreneur Balram Narula, Managing Director, Jet Knitwears Private Limited, who participated in 'Samriddhi 2016', speaks to Siddharth Kalhans about the problems of micro, small and medium enterprises (MSMEs). Edited excerpts:
You have been raising issues affecting the MSME sector from various platforms. What are the main problems of this sector and what kind of support does it need from the state government?
In Uttar Pradesh a MSME has to do the rounds of 27 departments to get the necessary approvals for setting up a new unit or venture. Only after this hectic exercise can we start our project. How can a new entrant start his project in UP and hope to flourish? Even if he succeeds in starting a business, he has to then go through the same process if he wants to expand the business. How can one concentrate on business if he is supposed to do the rounds of government departments all the time?
All this has been done for the big industries only. In this state the sops and rebates are being given to those investing Rs 100 or Rs 200 crore, and they are welcomed. For them all norms are eased, but the MSME sector is not getting all these concessions. Ideally, the smaller units should be given a single window clearance facility first, because the maximum number of industries is being set up in the MSME sector. Contrary to this, only a few select industries, and especially the big industries, are getting the maximum facilities.
The state government is running the skill development mission in a big way. Is this helping the MSME sector?
So far the MSME sector has not got any special benefit from the skill development mission. When a skilled worker in the MSME sector leaves his job the problem of a replacement comes up before us. The state government should start focused programmes under the skill development mission which could help in meeting the requirement of people in the MSME sector. Take the example of the hosiery industry. As of now no programme is being run under this mission that could provide us with trained workers.
Is this the reason why towns like Tirupur are far ahead of UP in the hosiery industry?
To a large extent this is true. The hosiery industry of Kanpur has never felt that the government is doing something for them. The entire industry, including my company, has achieved this progress on its own and we are posing a challenge to Tirupur. I am waiting for an invitation from the state government to discuss the challenges facing the hosiery industry, and if these are resolved we will be far ahead of Tirupur.
But the government has started a dialogue with the MSME sector.
I praise the present UP government for this. At least a dialogue has begun. For the last two to three years Chief Minister Akhilesh Yadav has been coming to our Micro, Small and Medium Enterprise Conclaves. We have submitted a charter of demands to him and apprised him about the problems faced by the MSME sector. On some issues work has begun, which is a big movement forward. I expect this to continue. The process of dialogue should not be stopped if there is any change of regime.
Rationalisation of taxes has always been a big issue for the MSME sector. Has something concrete been done in this regard?
There are many issues as far as taxes are concerned. In many cases you will see that taxes on a product made by the MSME sector in a neighbouring state is five per cent, while in UP it is 12 per cent. Such things promote illegal work. I would request the government to at least create a level playing field. The state government should also think about our social security.
What kind of social security does the MSME sector want from the state government?
We want the state government to provide social security for the MSME sector, and if this requires that some tax is increased, entrepreneurs are ready to pay. If the state government increases taxes on the MSME sector by 0.25 per cent and the money generated is used for providing social security we would be happy to pay it. Those paying higher taxes should be given more benefits and those who pay lower tax should be given less benefits. If such an initiative is taken, UP will be first state to have such a wonderful scheme.
You have been raising issues affecting the MSME sector from various platforms. What are the main problems of this sector and what kind of support does it need from the state government?
In Uttar Pradesh a MSME has to do the rounds of 27 departments to get the necessary approvals for setting up a new unit or venture. Only after this hectic exercise can we start our project. How can a new entrant start his project in UP and hope to flourish? Even if he succeeds in starting a business, he has to then go through the same process if he wants to expand the business. How can one concentrate on business if he is supposed to do the rounds of government departments all the time?
More From This Section
But the state government has announced various sops and rebates for industry, besides easing up on the formalities.
All this has been done for the big industries only. In this state the sops and rebates are being given to those investing Rs 100 or Rs 200 crore, and they are welcomed. For them all norms are eased, but the MSME sector is not getting all these concessions. Ideally, the smaller units should be given a single window clearance facility first, because the maximum number of industries is being set up in the MSME sector. Contrary to this, only a few select industries, and especially the big industries, are getting the maximum facilities.
The state government is running the skill development mission in a big way. Is this helping the MSME sector?
So far the MSME sector has not got any special benefit from the skill development mission. When a skilled worker in the MSME sector leaves his job the problem of a replacement comes up before us. The state government should start focused programmes under the skill development mission which could help in meeting the requirement of people in the MSME sector. Take the example of the hosiery industry. As of now no programme is being run under this mission that could provide us with trained workers.
Is this the reason why towns like Tirupur are far ahead of UP in the hosiery industry?
To a large extent this is true. The hosiery industry of Kanpur has never felt that the government is doing something for them. The entire industry, including my company, has achieved this progress on its own and we are posing a challenge to Tirupur. I am waiting for an invitation from the state government to discuss the challenges facing the hosiery industry, and if these are resolved we will be far ahead of Tirupur.
But the government has started a dialogue with the MSME sector.
I praise the present UP government for this. At least a dialogue has begun. For the last two to three years Chief Minister Akhilesh Yadav has been coming to our Micro, Small and Medium Enterprise Conclaves. We have submitted a charter of demands to him and apprised him about the problems faced by the MSME sector. On some issues work has begun, which is a big movement forward. I expect this to continue. The process of dialogue should not be stopped if there is any change of regime.
Rationalisation of taxes has always been a big issue for the MSME sector. Has something concrete been done in this regard?
There are many issues as far as taxes are concerned. In many cases you will see that taxes on a product made by the MSME sector in a neighbouring state is five per cent, while in UP it is 12 per cent. Such things promote illegal work. I would request the government to at least create a level playing field. The state government should also think about our social security.
What kind of social security does the MSME sector want from the state government?
We want the state government to provide social security for the MSME sector, and if this requires that some tax is increased, entrepreneurs are ready to pay. If the state government increases taxes on the MSME sector by 0.25 per cent and the money generated is used for providing social security we would be happy to pay it. Those paying higher taxes should be given more benefits and those who pay lower tax should be given less benefits. If such an initiative is taken, UP will be first state to have such a wonderful scheme.