MSMEs expect reforms, tax sops, reduced GST rates

Vijay C Roy

Tribune News Service

Chandigarh, January 28

Amid slowdown, the MSME sector, which is the backbone of the country’s manufacturing sector, expects favourable reforms for the growth of industry. Industrialists spanning several sectors have figured out their wish lists for the forthcoming Budget. They feel the Budget is likely to be a turning point for the micro, small and medium enterprises (MSMEs) and have following expectations:

Easy availability of loans

The MSME sector is expecting easy availability of loans as they feel that the lack of financial resources is one of the major impediments for their growth. “The easy availability of loans will help the industry to grow their operations and contribute to the economic development of the country as well. The industry is also expecting some tax sops such as mitigation of compliance burden, easing of working capital blockages and reduced tax rates from the upcoming Budget,” said Rajesh Gupta, co-founder and director, Busy Infotech (P) Ltd.

Incentives for textile sector

“In view of the current economic slowdown, the government needs to focus on increasing the consumption and improving the sentiments at the consumer level. In the textile sector, the focus of the government should be on increasing the exports by providing better incentives to the exporters and to make the exports more competitive in the international market as compared to neighbouring countries. The government is capable of taking challenges head-on and they must work hard to face the challenges,” said Vinod Gupta, managing director, Dollar Industries Ltd.

Sector-specific incentives

A large number of MSMEs are struggling with financial challenges and without special subsidies their sustenance is difficult. “Better liquidity and sector-specific incentives to the MSMEs should be the top priority of the Finance Minister in the Union Budget. The 6.5% GDP growth in the coming fiscal is not difficult once the liquidity resurges and the condition of the MSMEs gets improved,” said Rachit Chawla, founder and CEO, Finway.

Create level-playing field

2020 promises to be a huge year for digital transformation across industries. “We expect the government to introduce measures to provide the MSME sector a fair and equal opportunity to compete with large organisations. A level-playing field could be created by tax incentives,” said Sameer Nigam, CEO and co-founder of e-learning solutions provider Stratbeans.

Lower GST rate on auto parts

As the demand for automobiles continues to remain under pressure for several months now, the auto parts manufacturers have sought a uniform 18% GST in the Budget instead of 28% on some parts.

Develop cycle tracks

The struggling cycle industry has demanded that the government should construct bicycle tracks across all the cities as it will propel the demand for bicycles. The manufacturers wished that the government should bring incentives to bring down the prices of entry-level models. According to the Indian Bicycle Manufacturers Association, Ludhiana has been producing over 1.5 crore bicycles per annum with the support of small and medium ancillary units.