Earlier this month it organised a meeting with economic and legal experts on insolvency. The meeting was attended by Sangeeta Saxena, an official of the ministry of MSME; Jiten Khosla of the Indian Institute of Corporate Affairs (IICA); Pallavi S Shroff, a partner in the legal firm Amarchand & Mangaldas & Suresh A Shroff & Co; economists Bibek Debroy and Laveesh Bhandari; Anil Bhardwaj, secretary-general of FISME and two others representing the federation.

The meeting agreed that since 97 per cent of Indian MSMEs were partnerships or proprietorships, issues arising out of business failure could only be addressed through a modern personal insolvency law and an affordable litigation process-cum-administrative mechanism.

It also agreed that the proposed law could draw from the US bankruptcy code for its effectiveness and simplicity, while the litigation process/administrative mechanism needed to be chosen from the UK or other European Union countries to prevent it from becoming too “advocate-driven” and out of reach of most MSMEs.

One of the key challenges in India will be the way these laws will be applied as the court system is extremely outdated and slow. The backlog of cases is very long and in absence of any prior experience of the judiciary to handle these kind of cases, applying bankruptcy law would be tough. Combined with rigid labor laws, incorrect financial reporting by a large no. of SMEs and lack of bankruptcy lawyers will be some of the major issues which the ministry needs to look if they want the laws to be implemented properly.

Otherwise it will another instance of well meaning laws being drafted which never get implemented properly.

“We will take up the issue (to provide tax breaks or sops to these firms) with the fina-nce ministry and the revenue department soon in order to attract more funds to the sector since it is considered a high-risk area,” MSME ministry sec-retary Dinesh Rai said at an Assocham function on Thursday. He also asked the venture capitalists and private equity players to come out with clear cut guidelines in terms of the incentives they would like to get from the government

MSEs with an entrepreneur memorandum acknowledgment number from the Directorate of Industries or District Industries Centers and a registration with GS1 India for bar coding are eligible to apply, Madhav Lal told the SME Times.

Bar coding benefits businesses by offering product information that can simplify supply chain logistics and help increase quality assurance through product traceability.

Details about the program and registration forms are available on the websites…

www.smallindustryindia.com

www.laghu-udyog.com/

www.dcmsme.gov.in

…and GS1 India’s website www.gs1india.org