Narendra Modi govt 'anti-MSME', thousands of small business shut down in 10 years: Congress

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New Delhi, May 13 (PTI) The Congress on Monday accused the Narendra Modi-led central government of being "anti-MSME" and alleged that thousands of small businesses have shut down in the past 10 years.


Congress leader Jairam Ramesh claimed that the vital MSME sector accounts for 30 per cent of GDP, 40 per cent of exports and employs 12 crore people.

"However, the small businesses of India have spent 10 years suffering in this 'anyay kaal' through neglect or through malicious anti-MSME policies. It is a well-established fact that Narendra Modi has spent the last decade working only for his few chosen friends," he said in a series of posts on X.

"As a result, MSMEs have contributed to the lowest fraction of GDP in decades, face the highest tax rates in decades, and are dealing with severe job losses and price rise. Thousands of MSMEs have been shutting down," he added.


The Congress general secretary pointed to six major issues relating to "Modi-made MSME mismanagement", which include demonetisation that, he said, affected MSMEs the most and "shoddy" implementation of the GST regime.

Citing reasons for small businesses shutting down, Ramesh alleged that policies favour "crony corporates", "ill-conceived Income Tax 45-day payment rule", uncontrolled dumping of Chinese goods, and the MSME board being captured by "BJP cronies".

His remarks came after reports citing a survey said 72 per cent of MSMEs have been stagnant since the past five years.


Elaborating further, the Congress leader claimed that eight years after demonetisation, "it has become clear that demonetisation did nothing to curb black money or counterfeit currency in India".

"Unable to pay employees or repay their debts, many small businesses were forced to close. Business systematically moved from smaller firms to bigger, more organised players. An RBI study has shown that MSMEs were the worst affected by demonetisation," he added.

"Overall growth cratered after demonetisation and has not recovered since then. Even before the pandemic, India's GDP growth rate was at a 10-year low in 2019. This policy blunder shows the BJP's misplaced priorities and lack of concern for small businesses," he alleged.


The implementation of GST was another instance where the BJP failed to consider how policy changes would impact MSMEs, Ramesh said.

The Congress leader said despite the various issues faced by the MSME sector, policies are made only for "crony industrialists".

Ramesh alleged the electoral bonds "scam" also affected MSMEs and said, "Having taken Rs 8,000 crore from large corporates as electoral bonds 'chanda (donation)', the BJP's quid-pro-quo only extends to those large corporates who can afford to pay huge bribes. MSMEs trying to conduct business honestly are left out." "The Modi sarkar's latest disastrous anti-MSME move has been the Income-Tax department's 45-day payment rule … The complete incompetence of the Modi government has created a policy that dis-incentivises doing business with MSMEs," he claimed.


Ramesh claimed large companies have been cancelling their orders from MSMEs out of fear of higher tax liabilities and switching purchases to unregistered companies.

MSME associations have approached the government in despair, he said.

"This situation will end on June 4. The Congress Nyay Patra has promised a sea change in the business environment in India, ending tax terrorism and arbitrary policies, promising an MSME-first business policy," Ramesh asserted.


The uncontrolled dumping of Chinese goods, he said, is another factor affecting MSMEs. Immediately after the BJP took power in 2014, imports from China shot up.

The percentage of imports from China were at 11 per cent of the total before 2014 but jumped up to 16 per cent by 2016 and has stayed there for 10 years, according to the Congress leader.

"The share of industrial goods from China has increased even more, to 30 per cent of the total imported," he said.

Ramesh also alleged that the MSME board has been "captured by BJP cronies".

"The MSME board advises the MSME ministry on policy and utilisation of funds. It is supposed to raise the voices of the small businesses of India to the government, and ensure policy is made keeping their interests in mind," Ramesh said. PTI SKC SKC SZM