Debroy’s Demise: A Monumental Loss for Indian MSMEs, Says FISME

The passing of Professor Bibek Debroy, Chairman of the Prime Minister’s Economic Advisory Council, on November 1, 2024, has been deeply mourned by India’s MSME sector, with the Federation of Indian Micro and Small & Medium Enterprises (FISME) describing his loss as a monumental setback. Known for his unparalleled contributions to economic thought, Prof. Debroy was a renowned economist, legal scholar, and historian who championed the cause of small entrepreneurs in India.

Prof. Debroy’s partnership with FISME highlighted his empathy for MSME issues that previously received little attention. Among his most impactful contributions was his work on the challenges faced by entrepreneurs after business failures in India. In 2004, he commissioned Dr. Laveesh Bhandari to write Small Scale Industries in India: Large Scale Exit Problems, a pioneering work that spotlighted the plight of failed small business owners. The study emphasized India’s outdated insolvency and bankruptcy processes, which often led to the incarceration of entrepreneurs, marking a critical call for reform.

This advocacy culminated in a collaborative effort between Prof. Debroy, FISME, and India’s top legal experts, resulting in the initial drafts for an insolvency and bankruptcy framework specifically for MSMEs. The insights from this draft later contributed to the formation of the Insolvency and Bankruptcy Code in India, fundamentally transforming the landscape for small business recovery and closure.

Beyond legal reforms, Prof. Debroy was instrumental in familiarizing MSMEs with global trade dynamics, particularly through his work on WTO awareness with FISME between 1999 and 2001. His efforts helped MSMEs adapt to an open economy, encouraging a shift from a protected to a competitive outlook. His awareness campaign persuaded many MSMEs to reconsider the Reservation Policy for small-scale industries, demonstrating how openness could lead to growth and competitiveness in the global market.

Prof. Debroy also played a key role in strengthening MSME associations’ expertise in trade, notably through his involvement in the Strategies & Preparedness for Trade and Globalisation in India project in 2005-06. This five-year project built the capacity of MSME associations across India, equipping them to navigate the complexities of global trade.

Recognizing the importance of information access for MSMEs, he chaired the Advisory Council for the Knowledge and News Network (KNN), an MSME-focused news agency, which has since become a valuable information source for the sector.

As Chairman of the PM-Economic Advisory Council, Prof. Debroy maintained close ties with the MSME community, soliciting their feedback on policy proposals to assess their impact on smaller enterprises. His vast expertise across disciplines enriched the MSME sector, leaving an enduring legacy.

The FISME and the broader MSME community honor Prof. Debroy’s memory, acknowledging his visionary contributions with deep gratitude.

Disclaimer: This article is for informational purposes only. It is based on publicly available information and statements made by FISME, and does not constitute financial or professional advice. While efforts have been made to ensure accuracy, readers are encouraged to verify information independently and consult relevant professionals for specific guidance related to MSME policies and support.