For MSMEs, compliance can no longer be treated as a year-end exercise. It must become part of business strategy. Clean books, timely filings, well-drafted agreements and disciplined cash-flow management improve credibility with banks and investors, protect the enterprise during disputes and create a stronger platform for scale.

More room for MSMEs to grow

The revised MSME classification, effective from 1 April 2025, gives enterprises a wider runway for growth. A micro enterprise can now have investment in plant and machinery or equipment of up to ₹2.5 crore and turnover of up to ₹10 crore. For a small enterprise, the limits are ₹25 crore and ₹100 crore respectively; for a medium enterprise, they are ₹125 crore and ₹500 crore.

The revised classification · Effective 1 April 2025 — cross either limit and you move up

Both investment and turnover criteria matter. If either limit is crossed, the enterprise moves to the next category. Export turnover is excluded while computing the turnover limit. This is positive for MSMEs exploring global markets, as export growth does not by itself push them into a higher category.

Entrepreneurs should review their Udyam classification and ensure that their income-tax and GST records are accurate. A business that earlier moved out of the MSME bracket may now qualify again for linked benefits, credit support and delayed-payment remedies.

The new income-tax framework

The Income-tax Act, 2025 came into force on 1 April 2026. It largely simplifies and reorganises the earlier framework, reduces the number of sections and introduces the single concept of a “Tax Year”. For MSMEs, the key is understanding how the provisions affect cash flow and business decisions.

One important provision concerns payments to registered micro and small enterprises. Without a written agreement, payment must generally be made within 15 days of acceptance of goods or services. With a written agreement, the period cannot exceed 45 days. Delay can postpone the buyer’s tax deduction until the year of actual payment and may attract compound interest under the MSMED Act. Businesses must identify their micro and small vendors, record payment terms and monitor due dates.

The MSE payment discipline · What every buyer must now run

1. Identify vendors — Know which suppliers are registered micro and small enterprises.
2. Record the terms — No written agreement: 15 days. Written agreement: never beyond 45.
3. Monitor due dates — A missed date defers your tax deduction and accrues compound interest.

Eligible startups should examine the available tax holiday. A qualifying company or LLP can claim a 100 per cent deduction of eligible profits for three consecutive tax years out of its first ten years, subject to prescribed conditions and approvals. Those three years should be planned carefully so that the benefit is used during stronger profit years.

For smaller businesses and professionals, presumptive taxation offers a simpler compliance route, subject to eligibility, turnover limits and cash-receipt conditions. The correct structure — proprietorship, partnership, LLP or private limited company — should be chosen not only for today’s tax position, but also for future funding, governance and growth.

GST and labour: two operational resets

The GST reforms effective from 22 September 2025 simplified the main rate structure to 5 per cent and 18 per cent, with a special 40 per cent rate for specified luxury and sin goods. For many MSMEs, this reduced classification disputes and lowered rates on several products. Yet a rate change also affects pricing, margins, quotations, contracts, inventory and input-tax-credit reconciliation. Businesses must review HSN classifications and maintain a complete digital audit trail.

The labour consolidation · Effective 21 November 2025

29 Central laws (wages, IR, social security, safety) → Four Labour Codes (one definition of wages) → One framework (review payroll, hours, coverage)

The four Labour Codes, effective from 21 November 2025, consolidated 29 Central labour laws into a unified framework covering wages, industrial relations, social security and occupational safety. For MSMEs, the new definition of wages can influence provident fund, gratuity and other benefits. Appointment letters, payroll structures, working hours, overtime and social-security coverage should be reviewed with professional guidance as detailed rules continue to settle.

From compliance to capital

A strong compliance record supports access to finance. Options extend beyond conventional bank borrowing. CGTMSE can support eligible collateral-free credit facilities of up to ₹10 crore; TReDS can unlock cash tied up in receivables; and SIDBI, priority-sector lending, alternative investment funds and equity can support different stages of growth.

Beyond the bank loan · Routes a clean record unlocks

1. CGTMSE: ₹10 cr — collateral-free ceiling
2. TReDS: Now — receivables into cash
3. SIDBI & PSL: Stage — debt for steady flows
4. AIFs & equity: Scale — growth and expansion

The instrument must match the stage and needs of the enterprise. Debt may suit predictable cash flows. Early-stage investors may prefer compulsorily convertible preference shares or other convertible instruments, while mature businesses may raise equity for expansion. Capital should be chosen after examining cost, control, repayment obligations, dilution and the runway required.

Delayed receivables remain a major threat to MSME survival. Udyam-registered micro and small enterprises can approach MSME Samadhaan and the Micro and Small Enterprises Facilitation Council for recovery. The process may take time, but the legal protection makes it an important tool. TReDS can help prevent receivables from becoming a crisis by enabling earlier invoice discounting.

Protecting the enterprise and its legacy

As a business grows, founders must also look beyond immediate profits. Intellectual property, family assets and operating risks should be appropriately ring-fenced. Founder and shareholder agreements must address ownership, decision-making, entry and exit, transfer restrictions, valuation and dispute resolution. Weak documentation can destroy value when an investor enters or a disagreement arises.

Succession planning is equally important. It is not limited to writing a Will; it includes ownership, management continuity, family expectations, taxation and transfer of control. Planning early allows wealth to move to the next generation with greater clarity and fewer disputes.

Succession is more than a Will

Ownership · Management continuity · Family expectations · Taxation · Transfer of control

The central message from the session was clear: compliance is not the opposite of growth; it is its foundation. An MSME that maintains clean records, pays vendors on time, formalises employment, chooses the right capital and protects its assets is building credibility, resilience and long-term enterprise value.

MSMEs are the makers of India’s future, the strength behind our economy, the multipliers of wealth and employment, and the engines of intergenerational prosperity. The journey must move from compliance to capital — and from capital to lasting legacy.

*Regulatory provisions may change; businesses should obtain advice suited to their specific circumstances before acting.*

— Read on pallavisalgaocar.com · Enterprise India newsletter

MSMEs are the backbone of our economy. But for many MSMEs, the biggest challenge is not the lack of effort. The entrepreneur is working hard, the team is working long hours, and the business is constantly busy. Yet, many times, the owner still does not know whether the machinery invested in is giving the expected output, whether employees are fully utilised, whether inventory is moving correctly, or whether profitability is being measured accurately.

This is where automation and ERP become important. ERP is not merely a software. It is a supporting system that connects the different parts of a business. The first step is to break the fear of automation and the belief that the traditional way is always the safest way of doing business.

Beyond the Excel sheet

In a traditional MSME setup, every function often operates in isolation. Purchase has its own Excel sheet, stores have separate records, production maintains registers, sales may use another software, and accounts may be maintained in Tally. Each department prepares its own reports, and everyone feels that because Excel is being used, the business is automated. But Excel is only the first step. When too many Excel sheets exist independently, they create duplication, confusion, delays and, sometimes, a blame game when numbers do not match.

ERP → ~6 departments. One system replaces six disconnected sets of records — purchase to accounts, one flow of information

ERP changes this by creating one integrated flow of information. The output of one department becomes the input of another. This gives the entrepreneur one single source of truth. More importantly, it allows the final output to be traced back to the original input.

One integrated flow of information · Each department’s output becomes the next one’s input

Purchase → Inventory → Production → Quality → Sales → Accounts

Evidence, not guesswork

This is especially important in manufacturing and agri-oriented businesses, where output is often directly linked to the quality of inputs. Many businesses know that on some days the production yield is lower, but they are not able to identify why. With ERP, batch-wise inputs can be traced and compared with the actual output. If a particular input yields higher yields and another causes waste, the data will show it. Decision-making then becomes based on evidence, not guesswork.

ERP also helps an entrepreneur better understand profitability. In many businesses, expenses and income do not always belong to the same period. Some costs may be incurred today but relate to the next period. To understand true period-wise profitability, real-time data is essential. ERP can capture the cost of goods consumed, integrate bank accounts, help with online reconciliation, and show receivables, payables and ageing at the click of a button. For a small business owner, this visibility can be transformational.

For service companies, too, ERP can create clarity. Tools like Zoho can help measure employee time, project utilisation and actual output against attendance. Once such data is available, employees can be aligned better across projects based on their capabilities. The result is faster execution, better utilisation and higher revenue.

In manufacturing, ERP can help trace batch-wise production, quality issues and after-sales complaints. If certain products repeatedly show malfunctioning after delivery, the data helps the business understand the pattern and plan maintenance or corrective action. It also helps standardise the Bill of Materials. When quantities are standardised, deviations are easier to identify, and the optimal recipe or process can be frozen.

The real investment is time

Of course, ERP implementation may look costly in the beginning. The one-time setup, training and change in working style can feel heavy for an MSME. In many cases, implementation may take around 12 months because ERP is not just about software; it is also about SOPs and the organisation’s culture. If a business is person-driven and not process-driven, the first change required is to make it SOP-driven. That is where the real investment of time happens.

Lean, from classroom to shop floor

This brings us to Lean management. Lean is essentially the philosophy of maximising output while minimising waste. Many MSMEs know the concept but do not apply it regularly. Lean identifies waste in processes and encourages continuous improvement. In traditional businesses, waste appears in many forms:

Where waste hides in a traditional business

Overproduction · Excess inventory · Waiting time · Document movement · Duplicate entries · Searching for data · Wrong-dispatch defects · BOM errors

ERP silently becomes a Lean enabler. In simple words, it helps translate Lean from a classroom concept into a daily shop-floor practice.

The Lean toolkit, powered by ERP · How one system enables each practice

The scheme that pays for the journey

The Government of India is also encouraging MSMEs to adopt Lean through the MSME Competitive (Lean) Scheme. Udyam-registered MSMEs can participate in the scheme, which begins with a Lean Pledge and provides handholding for implementing Lean tools and techniques. It is especially relevant to manufacturing MSMEs.

Three levels of the Lean Scheme · Support deepens as the level rises — Basic is free; the government funds most of Intermediate and Advanced

• Free self-learning: Basic
• Funded consultants: Intermediate
• Deepest handholding: Advanced

Additional benefits are available for eligible categories such as women-owned and SC/ST-owned units, SFURTI cluster units, units located in the North-East, and those registering through an Industry Association or OEM route.

For MSMEs, this is an important opportunity. The future of enterprise will not be built only by producing more. It will be built by wasting less, measuring better, deciding faster and creating systems that can scale beyond the founder. Lean, ERP and automation are not only tools of big companies. They are now essential building blocks for every MSME that wants to move from firefighting to future-readiness.

— Read on pallavisalgaocar.com · Enterprise India newsletter

From SEO to GEO

Ashwini Ramesh, a faculty member at GIMS, explained how artificial intelligence is redefining digital marketing for micro and small enterprises. Traditionally, businesses focused on search engine optimisation: ranking higher on Google through backlinks, keywords and website traffic. Today the game-changer is Generative Engine Optimisation, which aims to get a brand mentioned and recommended by AI platforms like Google’s AI Overview, ChatGPT and Gemini.

SEO vs GEO · Two optimisation games, one brand

The shift means MSEs now need to create content that AI can easily interpret: structured Q&A sections, expert quotes, short videos, and FAQ-style snippets that directly answer user questions.

Mentioned, not just linked

AI doesn’t just look at links; it analyses how often a brand is mentioned across trusted sources and social interactions.

If your business gets cited or tagged more frequently, it becomes AI-endorsed!

— Ashwini Ramesh, Faculty, GIMS

In this new paradigm, the metric of success is no longer just website traffic but share of voice: how often a brand appears across AI search summaries. Whether on ChatGPT, Gemini or Google’s AI Overview, the more a brand is mentioned, the stronger its perceived authority.

E-E-A-T: the four pillars

To achieve this, Ramesh outlined the E-E-A-T framework Google uses to evaluate credibility. Each pillar lands differently for a small Goan brand.

• Experience — First-hand engagement: a food entrepreneur sharing real kitchen stories
• Expertise — Skill made visible through consistent, quality posts
• Authoritativeness — Cited by reputed platforms: TripAdvisor for tourism, Airbnb for homestays
• Trust — Clear contact details, ethical content, a traceable local presence

These parameters are especially important for Goan MSEs because trust and authenticity form the foundation of our local brand identity. Whether it’s a Bicholim pottery unit, a Mapusa spice business or a small Panaji café, projecting genuine local experience is now as critical as good packaging or service.

Meeting the customer where they ask

The customer journey · And the content that wins each stage

Awareness (Broad questions; FAQs, blogs and videos win here) → Consideration (Comparisons; reviews, testimonials, expert reels) → Decision (Pricing and credibility; trust converts curiosity)

Ramesh encouraged MSEs to start listening to their customers: study how people talk about the brand on sales calls, in review comments on social media or WhatsApp, and in chatbot conversations, then use the recurring phrases as prompts for AI-driven content. Strategies also differ across regions. For exports, cultural nuance, language translation and conversational tone are vital; for domestic sales, vernacular translations help.

The AI-readable content toolkit

Structured Q&A · Expert quotes · Short videos · FAQ snippets · Review replies · Vernacular translations

The session concluded on an optimistic note for Goa’s MSE sector: early adopters tend to benefit the most, and being first to adapt confers the mover advantage. In a small yet dynamic economy where traditional craftsmanship meets new-age innovation, Goa’s small businesses can use technology not just to market products, but to tell authentic, data-backed stories the world, and the AI reading it, can understand, amplify and trust.

— Read on pallavisalgaocar.com · Enterprise India newsletter

• $2.48bn — Goa’s annual merchandise exports (Santosh Raghavan)
• 0.64% — of India’s total exports (Nikhil Sheth)
• 12% — of India’s pharmaceutical exports (Pravimal Abhishek, IAS)
• 4th — largest pharma-exporting state (Pravimal Abhishek, IAS)

Margins over headwinds

In today’s unstable geopolitical environment, Pai noted, exporters face the challenge of working with unpredictable tariffs. Yet they continue to pursue exports for the higher margins on offer, earning the country foreign exchange along the way. While India’s foreign affairs are in capable hands, he stressed, the private sector must focus on accelerating exports.

On financing, Goa offers some of the best rates in the country: EDC lends at 1%, and even 0.5% for projects that are structured appropriately, with special incentives for Goan entrepreneurs, women, and those from backward areas. Pai urged entrepreneurs to approach EDC before starting their projects, so they can be guided on capital structures and the most suitable loan options. EDC, he said, views the entrepreneur as the focal point.

Exporters provide a valuable service to the nation by earning foreign exchange.

— B. Pai, Managing Director, EDC

The manufacturing surprise

Pravimal Abhishek emphasised a fact that runs against the common perception of tourism as Goa’s leading sector: while manufacturing contributes around 16–17% of India’s GDP, in Goa the figure sits between 25% and 28%. Goa also accounts for 12% of India’s pharmaceutical exports, making it the fourth-largest pharmaceutical exporter in the country. To stay competitive, he argued, Goa must cut the time entrepreneurs spend on regulatory compliance so they can focus on innovation, market research and scaling up.

Manufacturing’s share of the economy · Goa vs the national average · Source: GIDC, Export Forum 2025

• Goa: 25–28%
• India: 16–17%

What GIDC is fixing

GIDC has already moved in this direction, Abhishek said, and the World Bank’s new Business Ready framework, which scores regulatory clarity, public service delivery and infrastructure readiness, gives the effort a scoreboard. If GIDC, financial institutions such as EDC and the banks, and the industrial associations pull together, Goa can unlock substantial export potential.

1. Simpler procedures — Streamlined processes, adopting best practices from other states
2. Buyer–seller meets — Connecting Goan units directly with their markets
3. An open-source portal — All industry services delivered transparently online
4. Digital public infrastructure — Industry-related services, seamlessly in one place

The port that changes the maths

On infrastructure, Abhishek pointed to the Logistics and Warehousing Policy 2023, under which warehousing and cold-storage facilities are coming up in industrial estates. The bigger unlock is the MPT container terminal, with Delta Ports as the PPP operator, operational from the first week of September. It will reduce dependence on the Nhava Sheva port, open a new chapter for Goa’s exports through MPT, and significantly cut logistics costs.

What Goa ships

One need not be a large manufacturer to export, Raghavan reminded the room; what matters is having the right product and entering the right market. Goa currently exports goods worth $2.48 billion a year, and half of that figure is pharmaceuticals.

What Goa ships · Composition of the $2.48bn export basket · Export Forum 2025

• Pharmaceuticals: 50%
• Engineering goods: 16%
• Marine, plastics, linoleum, ore & others: 16%
• Organic & inorganic chemicals: 10%
• Electronics: 8%

His checklist for exporters was practical:

ISO-certified quality · Consistent supply · Price resilience · Drawback schemes · Free trade agreements · Refrigerated & special packaging · Study the market first

On market selection: study foreign markets carefully, understand customer requirements, assess competitors, and be prepared to compete even with low-cost, lower-priced rivals.

The headroom

Nikhil Sheth put the opportunity plainly. Goa’s share of India’s exports stands at just 0.64%, but with 67% of its population in the working-age group, there is great potential waiting to be tapped. He demonstrated how exporters can use export-specific websites for due diligence on products and markets before venturing into new territories, and representatives from Canara Bank closed the session with the range of financial products available to MSMEs, including seamless trade-credit facilities.

0.64% — Goa’s share of India’s merchandise exports (The headroom is the point)

The roadmap for unlocking Goa’s export potential lies in competitiveness, infrastructure readiness, and the collective will of its entrepreneurs to seize the moment.

— Read on pallavisalgaocar.com · Enterprise India newsletter

Liquidity is profit

The keynote speaker, chartered accountant Maheshwar Marathe, spoke on the new era of incentives for MSMEs. He briefed the hall on the sector’s main challenges and pointed to liquidity as the persistent one, underlining that recent government initiatives have mostly resolved it. What remains, he said, is awareness among MSMEs, adoption, and implementation.

The incentive alphabet Marathe walked the room through

TReDS · MSME Samadhaan · MSME ODR · GIFT · SPICE · LEAN · CLUSTER

The government is also promoting green technology and a circular economy through recycling, and is incentivising investments made by MSMEs through upfront subsidies, interest subvention and credit guarantees. Together these account for the new-era incentives for the sector.

It is time for MSMEs to understand that liquidity is profit, and to focus on liquidity.

— Maheshwar Marathe, Chartered Accountant · keynote speaker

Waste to wealth

The second keynote, from Abhay P. Fulke, senior scientist at CSIR, Mumbai, carried the title “Waste to Wealth: R&D Innovation for Transforming India’s Bioeconomy”. India, he said, stands tall not only as a consumer of global technology but as a leader in developing solutions to major environmental problems, with a stream of government initiatives bridging laboratory research and commercial-scale application.

Fulke has pioneered a transformative bio-reactor technology that tackles two pressing challenges at once: plastic pollution and the need for renewable energy. The bacterium *Pseudomonas mendocina ABF786* biodegrades plastic while simultaneously producing biodiesel. The carbon dioxide released during the breakdown is captured and used to cultivate microalgae, which is converted into microalgal biodiesel in turn; another marine bacterium turns plastic into biocalcite.

The CO₂ dividend · Algal biomass, before and after capture

• Baseline: 1×
• With CO₂ capture: 3×

Efficiency rises further with a continuous reactor, larger volumes of starting material and replenished nutrients. The innovation aligns with the national circular-economy push on plastic reduction, providing renewable energy and sustainable replacements for petroleum-based fuels, and reflects the shift from chemical-based industries to bio-based solutions.

The panel and the prize-winners

A panel discussion on the opportunities and challenges facing MSMEs in Goa, which I moderated, brought together Pravimal Abhishek IAS (managing director, GIDC), Assocham Goa chairman Manguirish Raikar, GSIA president Aniruddh Dempo, P. P. Kulkani (assistant director, MSME DFO Goa) and LUB executive council member Rahul Parab. The discussion ranged across central and state initiatives and the sector’s pressing problems: access to easy finance, cash flow, adoption of ESG and new digital technologies, and recruiting skilled labour in Goa.

The MSME awards · Presented at the Adhiveshan

A vendor development programme followed, led by the heads of public sector units from NBCC, Mormugao Port Trust, Goa Shipyard and ONGC.

A change of guard

The Adhiveshan also marked a change in the leadership of Laghu Udyog Bharati’s Goa chapter: Rajkumar Kamat handed over the presidency to me for the 2025–27 term. Mudit Agarwal takes charge as general secretary, with Jayesh Raikar as vice president, Vibhor Keny as treasurer and Rahul Parob as joint secretary.

The event was attended by Industries Minister Mauvin Godinho along with former Union Minister Suresh Prabhu, who complimented the chapter for organising the programme and driving towards a future filled with innovation, growth, and prosperity for Goa’s business community.

— Read on pallavisalgaocar.com · Enterprise India newsletter