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Informist, Tuesday, May 12, 2026

NEW DELHI – Large enterprises must ensure adequate working capital is available for micro, medium, and small enterprises, Chief Economic Advisor to the government V. Anantha Nageswaran said Tuesday. Large companies must start accepting invoices, make payments on time and help MSMEs source financial resources that follow the banking system, Nageswaran said at the Confederation of Indian Industry's Annual Business Summit. 

"Medium enterprises are the source of working capital for large enterprises. It should be the reverse," he said. "And because these enterprises have a much higher cost of capital, so large enterprises will depend on them (MSMEs) for working capital."

Freeing the MSMEs of working capital will help create a successful, positive bandwidth in terms of innovation which is "key to global solutions," Nageswaran said. India has a huge pool of MSMEs with many struggling to scale up and integrate better into the global value chain. 

According to the chief economic adviser, the government has made efforts to create a conducive ecosystem for them to grow. Having said that, he said that policymakers across the different wings of the government must make regulation for MSMEs simple, transparent, and trust-based. "Because we know that the regulatory architecture places a disproportionately large burden on micro and small enterprises, even their limited bandwidth. They don't have that much time to devote to government, but they are required to do so," he said. Larger enterprises can also specialise and help MSMEs in this, he added. 

On the part of MSMEs, Nageswaran said that they must invest in skilling to produce quality and standard products or services which will help them position better in the global value chain. They must also invest in skilling to stay ahead of artificial intelligence and robotic technology. "...those skills will also today have to be such that it makes them important and useful to the enterprise, so that they are not replaced by either artificial intelligence or down the road by industrial products."

B. Thiagarajan, managing director of Blue Star Ltd., who was also present at the event, advocated for a partnership model with MSMEs. The company sources a variety of raw material, components, and services from these smaller players.

Citing an example, Thiagarajan stressed that there was scope of furthering business in smaller towns where bigger players can partner with smaller entities in a win-win model. "...this is the model that will work," he said.  End

Reported by Priyasmita Dutta, Sagar Sen, and Shakshi Jain

Edited by Akul Nishant Akhoury

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