The Aryavarth Express
Agency (New Delhi): The Congress party accused the Narendra Modi-led central government of being “anti-MSME” and claimed that thousands of small businesses have shut down over the past 10 years. Congress leader Jairam Ramesh highlighted the critical role of the MSME sector, which accounts for 30 percent of GDP, 40 percent 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,” Ramesh stated in a series of posts on X.
He added that MSMEs have seen their contribution to GDP reach its lowest in decades, face the highest tax rates, and deal with severe job losses and price increases. Ramesh cited six major issues contributing to “Modi-made MSME mismanagement,” including the negative impact of demonetisation and the “shoddy” implementation of the GST regime.
Citing reasons for the shutdown of small businesses, Ramesh alleged policies favor “crony corporates,” criticized the “ill-conceived Income Tax 45-day payment rule,” and pointed to the uncontrolled dumping of Chinese goods. He also accused the MSME board of being captured by “BJP cronies.”
Ramesh elaborated that eight years after demonetisation, it is clear that it did not 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.
Ramesh further claimed that the overall growth cratered after demonetisation and has not recovered, with India’s GDP growth rate hitting a 10-year low in 2019, even before the pandemic. This, he said, showcased the BJP’s misplaced priorities and lack of concern for small businesses.
The implementation of GST was another instance where the BJP failed to consider the impact on MSMEs, according to Ramesh. Despite various issues faced by the MSME sector, policies are made only for “crony industrialists,” he argued.
Ramesh also alleged that the electoral bonds “scam” has affected MSMEs, claiming, “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.”
He criticized the Income Tax department’s 45-day payment rule, claiming it disincentivizes doing business with MSMEs. He noted that large companies are canceling orders from MSMEs due to fear of higher tax liabilities and switching to unregistered companies.
“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 asserted that the Congress’s ‘Nyay Patra’ promises a sea change in India’s business environment, ending tax terrorism and arbitrary policies, and implementing an MSME-first business policy.
Regarding Chinese goods, Ramesh said uncontrolled dumping has hurt MSMEs. Imports from China increased significantly after the BJP took power in 2014, rising from 11 percent to 16 percent of the total by 2016 and maintaining that level for the past decade. Industrial goods imports from China have also increased to 30 percent of the total.
He further alleged that the MSME board, meant to advise the MSME ministry on policy and fund utilization, has been “captured by BJP cronies,” compromising its role in representing the interests of small businesses.
