Draft policy to help grow nano, micro enterprises

Udyog Sahayak Enterprises Network put together by FICCI, TISS and Azim Premji University

Published - January 24, 2021 03:51 am IST - Bengaluru

A new policy on the anvil, the Udyog Sahayak Enterprises Network (USENET), may give a major fillip to the growth-stunted nano and micro-enterprises in India’s informal sector.

The proposed framework, whose draft was jointly put together by the Azim Premji University, the Federation of Indian Chambers of Commerce and Industry (FICCI), and the Tata Institute of Social Sciences (TISS), is aimed at providing a slew of growth-driven services to over 62 million nano and micro-enterprises that currently employ over 100 million people.

By enabling scale-up, the draft claims, USENET can aid in the creation of an additional 10.3 million jobs over five years, going up to nearly 56.9 million jobs over 10 years. Each of these small enterprises currently has one to three employees, and if given a boost, they have the potential to grow and create a large number of jobs, says the draft.

If the value-added per worker can be computed, according to the draft, it could bring in a 12% nominal growth in GVA (gross asset value), amounting to an economic value of ₹2.16 lakh crore in five years and over ₹19 lakh crore at the end of 10 years.

The draft proposes the creation of a support system that will improve Ease of Doing Business for the largely informal nano, micro and small entrepreneurs. Udyog Sahayak Enterprises, to be set up across the country, will deliver services such as digitisation and formalisation; availing of government loans, subsidies or other benefits; ensuring compliance with local, regional and national regulation; and aiding partnership with digital marketing platforms and digital payment platforms to these enterprises.

T. Muralidharan, chairman, FICCI, Telangana State Council, and co-author of the report said, “Through USENET, we are trying to create a countrywide entrepreneurial network. The platform will give millions of nano and micro-enterprises, which are facing harassment and growth challenges, information on policies, schemes and credit options, and visibility to lenders and customers, thereby help them grow and go digital.”

Report co-author and faculty member at Azim Premji University, Amit Basole, noted that rather than creating more nano-entrepreneurs, the country has to help existing MSEs grow in size. “We can do this by creating a support system which enables them to go digital, avail of government schemes, adopt new technologies, and increase productivity. This will create millions of new jobs,” he said.

According to co-authors of the proposal, the draft is currently under review by the group of ministers and the PMO. The Union government is likely to sanction upto ₹5,000 crore to part-fund CAPEX to set up at least 19 lakh USENET centres. Each of these centres will be headed by a Udyog Sahayak, who will have a mandate to help and monitor the growth of 15 to 50 enterprises.

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