Legalise WFH for entrepreneurs to allow credit access: MSMEs

New Delhi: The Federation of Indian Micro and Small & Medium Enterprises (FISME) has urged the government to consider legalising work-from-home for the self-employed in the sector, technological upgradation to revive manufacturing in such units, and allowing them easier access to credit.

In a submission to parliamentarians, FISME also sought reduction in cost of contractual litigation for MSMEs, insolvency rules to destigmatise failure and prevent suicide attempts among the stressed owners of small units, and making MSMEs resource-efficient to ensure sustainable jobs.

FISME secretary general Anil Bhardwaj said the demands should be included in the manifestos of all political parties. Dates for the general election in the country are to be announced soon.


According to the submission, some 11 million entrepreneurs work from home in India. Because of their informal setup, the organisations these entrepreneurs manage aren't identified as beneficiaries under government schemes and can't access formal credit.

The demand to widen the ambit of the Insolvency and Bankruptcy Code (IBC) is important as at present the pre-packaged insolvency resolution process applies only to corporate MSMEs and not to firms and proprietorships. Around 97% of MSMEs are firms or proprietorships. Another demand pertains to making MSMEs environment-friendly, as different countries impose additional costs on goods that have a big environmental footprint. The MSME sector accounts for 50% of India's exports, including employment intensive sectors like textiles and garments, leather, jewellery and light engineering products. The federation said that 62 clusters account for 80% of exports, and suggested mapping their carbon intensity to develop a roadmap of greening their processes. The fourth demand aims to improve credit access for MSMEs which has always been a challenge. The estimated credit gap in MSME financing is ₹25 lakh crore, it said.