Pendency has caused MSMEs to shut down, ultimately affecting economic growth: Justice SK Kaul

India cannot sustain its endeavour to generate employment with a blind focus on development and the need of the hour is equitable growth through the promotion of Micro, Small and Medium Enterprises (MSMEs), Justice Sanjay Kishan Kaul of the Supreme Court said on Wednesday..MSMEs, the judge said, have not only led to employment generation, but are also the solution to bridge the gap between the rich and poor regions of the country."As important as it is, a blind faith in centralised industrialisation will only result in increasing monopolies and that is possibly not the way forward," he underscored. .Justice SK Kaul was speaking at the launch of the book Law Relating to Micro, Small and Medium Enterprises authored by lawyers Amit George and Tariq Khan. Among the other guests at the event were the Delhi High Court's Justice Rajiv Shakdher and Senior Advocate Sidharth Luthra..He highlighted that despite the 1991 reforms pushing the development agenda, employment generation has remained a top challenge for policymakers. To tackle this, he said that we must learn from the Chinese economy on how inept the one-size-fits-all formula is in microeconomics."India is a unique country, geographically and demographically, the solution must also be unique and suitable to the landscape.".The large migration from villages to cities was discussed by Justice Kaul, which according to him occurred due to a lack of employment in their own areas. As a solution, the judge said that MSMEs could facilitate thosee people staying in their surroundings, and also earning from what they were doing."Nobody would carry themselves so far away from their hometowns if the opportunities were there," he explained. .The judge went on to observe that what hindered the flourishing of MSMEs was an inefficient dispute resolution mechanism. He emphasised that working on a judicial solution was as important as working on a legislative solution."It is important to ensure that the judicial machinery provides a nurturing environment for MSME growth. History is rife with examples that despite legislations and schemes, conflicts and disputes are bound to arise with different stakeholders."Another impediment to dispute resolution, Justice Kaul said, was the ever-growing backlog which had resulted in several MSMEs shutting down."MSMEs are smaller companies with lesser capital, shorter production time and fewer means to drag disputes in court for years. This has led to several MSMEs shutting down, ultimately affecting economic growth."The judge pondered a solution, wondering if India could adopt special courts for MSME matters or constitute special tribunals with expert members, on an ad hoc basis.However, he concluded that the solution ought to come from the stakeholders in the MSME sector themselves. .Justice Rajiv Shakdher, while speaking on the subject, said that MSMEs were not a new concept and dated back to the time of independence where the thought of the first small-case industries was rooted. He added that, for a very long time, till the economy was liberalised, small-case industries were firewalled."The authors actually flag something important- liberalisation actually disrupted the SSI industry", he said appreciating the book's scholarship. .Senior Advocate Sidharth Luthra spoke to the advantages of MSMEs which were demonstrated by 6.33 crore MSMEs employing 11+ crore people.He pointed out that though our economy was growing, employment was reducing and a possible solution to this challenge was MSMEs as they took jobs to the people."The perspective that we have to look at is - on one hand we're looking at economy, it's increasing speed but it's reducing employment. That is where MSMEs have the most important roles since they're often labour intensive."He stressed that what is eventually required is dignity in employment, and thus social development was only possible when the MSME sector was worked on."Focus on MSMEs has become crucial for India's social and economic growth, I emphasise on social", said the senior counsel..[Read our live-coverage of the launch here]