Small units in Madhya Pradesh faced the red-tape as the biggest block to their progress in 2008.
Though state Chief Minister Shivraj Singh Chouhan took personal interest in ironing out problems of SMEs, too many processes and permissions coupled with poor bank credit, marred growth of the sector which constitutes a significant contribution to the state gross domestic product.
The year failed to address problems of the rationalisation of entry tax, abolition of octroi, removal of the multiplicity of tax, separate industrial township industrial area, amendment in store purchase rules, extension of time period for building permission from local bodies at district level, review of labour laws, addition of 45 more industries in the no-objection list of the state pollution control board and creation of a decentralised establishment system for SMEs.
The apex business chambers like Confederation of Indian Industry, Federation of Chambers of Commerce and Indian Industry and Madhya Pradesh Small Industries Organisation raised these issues at various occasions, but in vain.
A proposal to create separate local bodies to collect tax from industries was mooted and floated by previous government, but the BJP ruled government skipped on the issue. These were, however, mentioned in its 2003 manifesto.
Similarly, the state government extended the time period of sanctioning of building permission (issued by industrial area officers and local bodies to SMEs) from a year to two years, but a notification has not been issued despite repeated requests by various industrial organisations during 2008.
The CII’s long-pending demand that the 5 per cent tax the state has imposed on coal under Madhya Pradesh Gamin Avsanrachna Sadak Vikas Adhiniyam with effect from 2005 be revoked was not considered. This has led to an increase in coal prices by Rs 100 per metric tonne. The entry tax on coals has also been raised from 1 per cent to 2 per cent.
The bureaucrats allegedly ignored promises made by State chief minister Shivraj Singh Chouhan to offer various facilities to the coal industry. Madhya Pradesh Laghu Udyog Sangh has said a in a memorandum to state industries department that notifications pertaining to various announcements, sops, facilities and amendments are still awaited.
The apex organisation of SMEs, MP Small Industries Association, saw no action on its demands of allotment of more land for small and medium industries in industrial areas in Tikamgarh, Itarsi, Gwalior and Govindpura (near Bhopal), regular waters supply in industrial areas like Pipalkhiria (near Bhopal), Pratap Pura in Tikamgarh districts, shifting of Gwalior SME sector from Birla Nagar to the industrial area and basic infrastructure in Pipalkhiria (Bhopal) industrial area.
The SME sector’s demand for amendments to Land Allotment Rules 1974 was ignored. “The 1974 rules had been amended in 1999. It had made an adverse impact on the SME sector. Few other issues which dogged the year 2008 for the sector are; funding through collateral security, creation of skilled employment, in-effective single window system and cumbersome documentation process.
