SMALL IS BEAUTIFUL
Chief Minister Ashok Gehlot bets big on MSMEs with a three-year, write-your-own-ticket offer
The Congress may have lost the general election but in Rajasthan, it is putting into action one of the big promises in its election manifesto—a focus on Micro, Small and Medium Enterprises or MSMEs as a route to job creation. As part of this initiative, the state launched a website for MSMEs on June 12. An online registration followed by an instant acknowledgment is all the ‘paperwork’ needed to start a business unit. In about three weeks, 708
people, including several women, had registered.
For the next three years, as the spiel goes, they needn’t worry about any approvals and can focus on building their businesses. The new rules for the Rajasthan MSME (Facilitation of Establishment and Operation) Ordinance, 2019 were notified on May 24 and will come into force if passed during the current budget session. Given the low capital threshold for MSMEs and the assurance of no inspections
under any state or even central laws (those that the state is empowered to waive on declaration of intent), this reform may have farreaching benefits for aspiring entrepreneurs, besides creating jobs. Of course, the prevalent laws on safety, labour and environment have to be followed but no verifications are required. Chief minister Ashok Gehlot said on the sidelines of the website launch, “This will be the end of the Inspector and Permission Raj.”
‘Regulatory forbearance’ is key here. No government agency can seek entry into MSME premises during these three years for inspection, nor do investors have to disclose the extent of investment, employment and land use. The website sends a copy of the certificate to the departments concerned, who can take action after three years if the facts are found to be misrepresented.
After the threeyear grace period, investors will have to get all the necessary permits within the next six months. In all this, the hope is that only a minuscule fraction will misuse the faith the Rajasthan government is placing in investors. The new Gehlot regime is also setting up an Export Promotion Council while the nearfinal Rajasthan Industrial Policy includes massive fiscal packages, dynamic power tariffs, a focus on the service sector, and a 50 per cent reduction in timeline and development of new industry clusters. The chief minister says “anyone approaching us for investment should not be able to say he is getting a better offer somewhere else”. The proposed changes being examined by finance and other departments include a substantial exemption in stamp duty, electricity and land conversions, subsidy for employment and state GST and incentives for water conservation and evironmentfriendliness. There will also be ‘dispute resolution mechanisms’ at the district and state levels.
In the past, the Rajasthan bureaucracy has been notorious for red tape and a lack of vision. During the previous BJP government too, most of the project MoUs officials signed failed to take off. Perhaps why Gehlot has set no targets so far. As he puts it, “If our government is seen as investorfriendly, both locals and outsiders will choose us for business.” The results will be visible on the ground in the next two years.
UNENCUMBERED CM Gehlot launches the MSME portal in Jaipur