Visakhapatnam: MSMEs lack awareness on state schemes
Andhra Chamber of Commerce conducts workshop on government benefits.
Visakhapatnam: Various government policies are still not being utilised by the micro, small and medium enterprises (MSME) due to lack of awareness.
Andhra Chamber of Commerce, one of the oldest industry bodies in South India, conducted a workshop here on Monday to throw light on the government schemes and benefits available for the MSME sector.
Chennai-based chartered accountant Gopala Krishna Raju revealed that law is protecting the MSMEs from both sides. Under public procurement policy, the public sector units shall procure 25 per cent of the annual purchases from the MSMEs. Out of which, 3 per cent target is reserved for women entrepreneurs.
At the same time, MSME Samadhaan is incorporated under the MSME Development Act, 2006 as a remedy for delayed payments. The state governments were directed to set up MSME Facilitation Councils for settlement of disputes. The buyer is liable to pay compound interest to the supplier if the payment is delayed beyond 45 days of acceptance of the goods.
During the workshop, cost and management accountant (CMA) professionals explained strategies for MSMEs to maximise profits by reducing the costs while improving the business and without compromising the quality of the product. They suggested applying various techniques of strategic cost management.
Well known CMA P. Raju Iyer said, “New approaches to strategic cost management have emerged such as target costing and kaizen costing that played a major role in the growth of many MSMEs. Cost management can be achieved through simple changes in the production planning like effective utilisation of space and reducing wastage.”
He is the chairman of Continuous Professional Development Committee and council member of Institute of Chartered Accountants of India (ICAI).
Explaining some concepts of strategic cost management, he said that absence of focus on cost is one of key reasons for the exit of many MSMEs from the business within first four years.
There is almost unanimous agreement among studies that strategic cost management impacts positively on MSMEs’ performance, he informed.