AIMA MSME Mission, Vision & Suggestion for MSME Sector

To Encourage, Motivate, & Project Young Entrepreneurs to move in to the Second Rank of Leadership for the future of MSME sector. Bring SME sector under one roof / umbrella for better effective approach to local authority / State & Central government to achieve their common goal for the growth, development & progress of different segment of Industries under SME sector.

AIMA will provide information & assistance for the opportunities provided by MSME ministry & National Small Industries Corporation (NSIC) in various sectors with data & relevant inputs on development, growth & progress of  MSME.

AIMA will strive to give high priority & monitor issues concerning the governance to improve delivery mechanisms & redressal of grievances of the MSME sector in close co-ordination with the state/central government to encourage young  entrepreneurs, self employed individuals in the MSME sector.

To co-operate with other Micro & Small Medium Enterprises Associations in India with an intention to further the objectives of the AIMA & with this end in view to affiliate groups & bodies, also by getting itself affiliated to any national body if considered necessary.


MSME sector is considered to be the ‘BACKBONE OF INDIAN ECONOMY’ playing vital role in the economy of the country by, Providing job opportunity to unskilled/semiskilled/skilled persons /citizens, Forty five to Fifty percent export share of the total export of the country – in earning foreign exchange, Playing major role /share in GDP too.

Looking to the above facts AIMA suggesting, following revision /amendments in present MSME policies for the growth development and progress of MSME sector

1.To Amend MSMED Act 2006

Manufacturing Enterprises  
(Celing on Investment  in Plant & Machinery)


Service Enterprises

( Celing on Investment in Equipment )

Rs 25 to 30  Lakh Micro Rs 10 to 20 lakh
Rs 5 to 10 crore Small Rs 2 to 5 crore
Rs 10 to 25 crore Medium Rs 5 to 10 crore



We suggest that the tax Audit limit for all enterprises, recently enhance in the present budget to Rs 1Crore should be further enhanced to Rs 3crore, as many of the small MSME units cannot afford the tax audit fees charged by Chartered Accountants .Moreover total C.A in the country is nearly 1.75 lakhs, which is an inadequate number for conducting such audits for the innumerable number of MSME enterprises.


  • The VAT Audit limits which are presently similar to tax audit limits should also be enhanced to Rs 3crore
  • These audits also be allowed to be conducted by tax practitioners and Cost Accounts apart from chartered Accountants.
  • Further for   MSME’s ,the MSME Ministry should fix the Fess payable  to the  Professionals as   Minimum & Maximum  fees payable on the basis of the Turnover of  these  SME’s ,and thereby  make it affordable to them.


5. Implementation of Delayed Payment Act : This act should be strictly        

Implemented and monitored since the Working Capital constraints hamper the Functioning of the MSME’s and at times put great stress on their very survival.  The Working Capital shortfall leads to financial crises and the implementation of  this Act by all Corporate Enterprises will lead to timely payments to the MSME sector and will also Avoid their borrowings being reported as NPA’s by their Bankers.

It is suggested that a provision be incorporated in the Income Tax Act to the effect that if the payable amount to the SSI sector is not paid in time  by the corporates the same will be added to the Income of the corporate like statutory payments under section 43 B of IT ACT.      

6. Credit Guarantee Fund Trust For Micro And Small Enterprises (CGTMSE)



  • The CGTMSE Scheme should also be provided by PSU / Private Sector Banks, and Co operative Banks.
  • The limits of Funding should be enhanced from Rs 1 Crore to Rs 5 Crores
  • Further this limit should be different for Rural and Urban located Enterprises. For Urban Located Enterprises, the limit for Funding may be raised to Rs 5 Crores, while for Rural Enterprises the limit may be raised to Rs 2.5 Crores
  • Loan upto Rs 10 lakhs without collateral :-The MSME Sector Loans of Rs 10 Lakhs without Collateral is also very difficult to avail from PSU/Pvt Sector Banks. RBI should strictly monitor the progress of this scheme and ensure that all branches of all Banks are sanctioning this loan as per guidelines of RBI.
  • Further suggesting to Revised loan amount of Rs 10 lakhs to 15 lakhs for rural enterprises and 20 lakhs to urban enterprises.

7. Abolishment of Inspector Raj :

The small scale industry sector and the MSME is mainly a one man show and it becomes very difficult for them to handle the number of inspectors of various departments, who visit the premises to find fault and penalize them. This issue has been brought out at various representations made at different forum, But to no avail .We believe that such visits only breed corruption. Our recommendation is that all licenses issuing Agencies should permit on line filling and human interface in the form of such un-announced visits should be avoided.

8. BSE SME Exchange :

BSE SME Exchange: is good avenue for the growth and development progress of SME sector which is considered to be a back bone of Indian economy. In the past also OTC exchange was floated but somehow it was failed. AIMA is very much concerned about the success of SME Exchange AIMA strongly opines that the following steps taken by MSME Ministry in close coordination with Ministry of Finance and the Reserve Bank of India would go a long way in boosting public confidence in the IPO’s offered by the SME sector.

  • The Public and Private Sector Institutions like LIC and Various  Mutual Funds should invest at least 20% of their Investable Funds in the SME Initial Public Offering so that the Fund Inflows improve and boosts the Investor Confidence in this sector.
  • The Reserve Bank of India should direct the public and Private Sector     Banks to treat these funding by the above institutions to the MSME sector Under Priority Sector Fund Investment.
  • A Scheme giving tax concession under 80C of the Income Tax Act should be announced so that more investors will invest in the SME sector in the same manner as they presently do in Debt instruments.
  • The Government should on its own also ear-mark certain Funds to invest in SME sector to boost the Funding for this sector.
  • Clause for Minimum application amount as well as minimum trading lot of Rs. 1,00,000/- to be reconsider to Rs. 50,000/- this will give an opportunity to small investor also.
  • The other guideline that Merchant Banker shall be responsible for market making for a minimum period of 3 years should also be withdrawn as these guidelines would be very difficult for MSME to adopt and implement.

 9. MSME Entrepreneurs Representation On The Board Of PSU / PVT Banks:

Our Final suggestion pertains to the Nomination of MSME Entrepreneurs to the Board of Directors in public Sector / private Sectors Banks by the Ministry of Finance.

In the Shareholder Director’s Election. The MSME Ministry should lend its support to the MSME Entrepreneurs, and this letter of support should be made available at the time of filling the nomination. The Nomination of MSME Entrepreneurs on the Board will help in safeguarding the interest of the MSME  Sector. such Persons will be versed with the requirements and problems faced by the sector especially with regard to Banking and will thus add value to the Board of Directors of Public and Private Sector Banks.

10. Uniform Base Rate


PLR/Base Rate Differs from Bank to Bank and the difficulties thereon is   suggested that RBI in consultation with the Indian Bank Association should      ensure  that all PSU / PVT Banks have a uniform PLR as well as uniform BASE rate in all  the commercial Banks.

11.  ESIC Scheme :

  • The ESIC Scheme is Mandatory
  • Apart from other flows, its effectiveness in meeting the needs of the employees of these Enterprises is in doubt as very few employees opt for the benefits provided by this Scheme. AIMA therefore sincerely believe that the ESIC Scheme should be exempted from the ambit of MSME, especially since most MSME Units would like to opt for Group Insurance Scheme Operated by Private and Public Sector Insurance Companies to cover workers/employees of these organizations.

    MSME Entrepreneurs is the opinion that if the exemption  is not granted than Employer  also should be covered under ESIC Scheme. as on today medical expanses for normal illness as well as major sickness and operation is increasing day by day and it is not bearable / affordable  by MSME Entrepreneurs hence employer’s also be to covered under ESIC Scheme as a beneficiary / IP of ESIC Scheme. In short by ESIC Scheme Employers as well as Employees will be benefited. It is needed to look into the short falls of the Schemes.


12.Outstanding Subsidies With Central/State Government To Be Considered As Bank Guarantee Against Credit Facility:

Almost all the Indian States have declared certain subsidies for MSME sector like Capital Subsidy, Interest Subsidy and VAT refund subsidy for new investments. It has been observed that due to lack of budget these subsidies are not paid to MSME Sector Units as they become due.  The Government should introduce a scheme for MSME sector by which they can get funding against due subsidy amount, as certified by respective State Governments, from their regular bankers. These certificates can act as security for letting the bankers to advance the subsidy amount to the eligible units as short term funds.

13.Export Promotion Policy

In recently announced export promotion policy by Ministry of Trade and Commerce, some export incentives are announced.  We request for additional incentives for MSME Sector like:

  • Cash incentive for export of any item manufactured by MSME Sector should be 2% over and above the normal incentive rates for general industries.
  • Interest Subvention Scheme should provide additional 2% Subvention over and above normal rate of 2% for General Industry.


14.Cluster Formation

Process of cluster formation should not be held up for want of budget allocation  in any of the financial year and the process should be carried on even after financial year end.

15.CLCSS Applications

  • At present SIDBI is a nodal agency for accepting the documents for CLCSS as and when the project comes into operation.  In some cases SIDBI refuges to accept the applications due to non availability/allocation of funds by the Government. 
  • Our request is to ensure that SIDBI should continue accepting the applications irrespective of allocation of funds and process these applications.  The payment to the applicant may be made whenever the funds are available/allocated by the Government.

16.Upper Limit For MSME Sector

Upper limit for the investment in MSME sector should be increased to Rs.25 Crores so that those units can have access to modern and expensive technology which is available from US, Europe and even South East Asia.

17.Upper Limits Of Investment In Projects

Due to inflation in India and Rupee depreciation v/s. US Dollar, the Costs of Project have already increased substantially.  There is an immediate need of hike in the upper limits of investment in projects.

18.Accounts Are In Default

In recent times, some of the lending institutions are publishing photographs of Promoters and Guarantors of MSME Units whose accounts are in default.  This leaves a stigma for the promoters and their family members. It is requested to take an immediate steps to stop this practice which humiliates the MSME entrepreneurs and their family members. This humiliation  Frustration may result in suicide of Entrepreneurs. 


MSME sector constitutes an important sector of our National Economy and has shown continued dynamism in terms of growth, the number of enterprises, their production, employment generation and their contribution to the country’s manufacturing output and exports. About 75 per cent of the India’s enterprises are medium, small and micro produce a very wide range of products which include both simple and sophisticated engineering products,electrical,electronics,chemicals,plastic,steel,cement,textile,paper, ready made garments etc. Ancillary units cater to the requirements of Large Industrial units for materials, components, consumables and contribute about 45 per cent of the total manufacturing output and nearly 40 per cent of India’s exports. The structural transformation of Indian Economy through Information Technology, Bio-technology, Food Processing, Drugs and Pharmaceuticals, Electronics etc. is prominently manifested through the MSME sector.

In view of the importance of MSME sector, the Government, from time to time ,has taken a number of measures to provide access and improve credit delivery as well as facilitate the marketing endeavor. However, there has not been any significant improvement in the adequate and timely availability of credit to micro and small scale industries, neither their marketing has been board based. As a result, excepting a few, especially those who are tied up with the supply chain of large companies, a vast majority of MSME units remain in sub-optimal scale of operation arena and find it exceedingly difficult to carve a niche in the highly competitive market.

In further consideration of the important role played by the MSME Sector in the Economic and Social Development of the country and provide relieves to them from the innumerable hurdles they faced, The Hon’ble  Prime minister met the prominent MSME Associations which highlighted their concern and issues. The Prime Minister announced the setting up of a task Force under the Chairmanship. Principal Secretary to the prime minister to Address the issues and concerns referred to by the MSME Association and to suggest a road map for action to mitigate the problems and restore confidence of this sector .


1.Separate Sub-target for micro enterprises under priority sector lending.

2.Strict adherence of scheduled commercial banks to the stipulate of year-on-year credit growth of 20 per cent to micro and small enterprises.

3.Setting up of SME Exchange, and

4.Working out a suitable mechanism which enables the quick revival of viable sick enterprises and allows unviable entities to close down speedily.


1.Earliest introduction of a Public procurement Policy for MSMEs with a target of at least 20 per cent of annual volume of purchases of Government Department and PSUs from the micro and small enterprises.

2.Encouraging formation of consortia of units manufacturing same products.

3.Encouraging participation in domestic and advertisement of MSME products

4.Procurement of Undustrial raw materials at competitive cost.

The Industry greatly welcomed the above recommendations and expressed their confidence in the recommendations. It was felt that if implemented in proper spirit, these will have far-reaching impact on the MSMEs and would change the scenario completely.

The feelings of the industry were considered by the Government and it was announced that time bound implementation of the Task Force Recommendations would be expedited.

It is now time to ensure the proceedings of the Task force recommendations and the guidelines formulated for monitoring implementation of these recommendations.