Regulatory Barriers for Micro Enterprises

Priyanshi Gupta, CCS working paper no 320

The contribution of the Micro, Small and Medium Enterprises (MSMEs) to the India's growth has been declining. This is because the registration and licensing process are greatly hampered by the inefficient channels. Multiple departments have multiple requirements and there is a lack of a streamlined process. Wide information gaps exist with entrepreneurs unaware of the procedures for registration or licensing, the requirement of various licenses, applicability of different laws, or the benefits associated with MSME registration. Outdated legislation with respect to the insolvency laws and corruption at every stage of entry and operation are also major barriers.