New Delhi: Comptroller and Auditor General (CAG) K Sanjay Murthy on Thursday flagged excessive regulatory burdens as a key factor undermining the competitiveness of micro, small and medium enterprises (MSMEs) and slowing industrial growth.
Stressing that MSME reforms must span multiple departments and levels of government—Centre, states and local bodies—Murthy said their success depends not just on policy intent but also on inter-departmental coordination, integration of digital systems, uniform implementation, and effective feedback mechanisms for citizens and businesses.
The CAG was addressing senior officials from central and state governments, along with representatives from industry bodies such as CII, FICCI, Assocham, Phdcci and Fisme, as part of the auditor’s ongoing pan-India audit on ease of doing business (EoDB) for MSMEs.
“We need a four-pronged approach—simplification, digitalisation, decriminalisation and elimination of redundant laws—all of which are crucial for MSMEs,” Murthy said. He added that ease of doing business and ease of living have emerged as priority focus areas for the federal auditor, cutting across departments, geographies and sectors.
The meeting was part of the consultative process for the pan-India horizontal audit on EoDB for MSMEs. Murthy noted that while the Centre has launched wide-ranging initiatives to reduce compliance and promote deregulation, the real test of reforms lies in last-mile delivery. “The audit seeks to assess whether systems are delivering outcomes as intended,” he said.
Highlighting the sector’s importance, Murthy said MSMEs are vital not only for economic growth but also for inclusive development, entrepreneurship, resilient supply chains, and job creation across rural and urban India.
The outcome-oriented audit will cover the period from 2021-22 to 2025-26 and will involve field-level assessments. According to the CAG, its findings are expected to help governments fine-tune reforms, lower compliance burdens and create a more predictable, transparent and enabling business environment—allowing MSMEs to focus on productivity, innovation and growth.
