Let’s have light-touch regulation for small businesses.

The role that India’s micro, small and medium enterprises (MSMEs) play in the country’s economic growth is evident. The sector, with over 60 million functional units, employs around 110 million people and contributes a little less than 30% to the country’s economic output and more than 40% to its exports. The minister in-charge of MSMEs, Nitin Gadkari has made the government’s intent clear: To turn the sector into an ‘engine of growth’. That is a welcome aim. The recently announced Rs. 3 trillion relief package for the sector under the Atmanirbhar Bharat plan and a slew of other policy changes by the government, including the reclassification of MSMEs, may address the liquidity needs of this financially-stressed sector. However, this is not the only area where MSMEs require intervention.