Rajesh Dhingra is a worried man. The managing director of Dr Best Pharmaceuticals is grappling with urgent questions about the future of his two-year old small pharmaceutical business, which manufactures multiple formulations in the city of Chandigarh. He has credit issues to sort out and needs working capital to make sure production goes on. McKinsey once forecasted the Indian
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want to play safe. Large enterprises can manage, but for MSMEs, it is a huge headache,” says Dhingra. To top things, tax incentives in key manufacturing hubs (such as Baddi, Himachal Pradesh) have been withdrawn. This means operating margins of MSMEs in such regions will shrink further, thanks to the government-imposed price caps and increased raw-material and working-capital costs.