The All India Association of Industries (AIAI) has called upon the Centre to adopt focused measures for effective implementation of the schemes enumerated in the Union Budget 2022-23 as the budget contained progressive policy measures to reform special economic zones, increase capital expenditure, issue green bonds, set up digital banks and support local manufacturing of solar modules.
AIAI said in its newsletter that the budget also supports MSME sector by extending the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) and revamping the scheme for collateral-free loans under CGTMSE.
“At the same time, we suggest the government to take focused measures for effective implementation of these schemes at the grassroot level. Many MSME units complain that they are unable to access collateral-free loans under the CGTMSE scheme, while many small scale enterprises face delay in credit disbursement under the psbloansin59minutes scheme. Delayed settlement of dues by buyers is another challenge faced by MSMEs, which require immediate policy measure to direct large companies to disclose their outstanding dues to MSME vendors.”
AIAI President Dr Vijay Kalantri also welcomed the initiative to interlink four digital platforms, viz. Udyam, e-Shram, NCS and ASEEM portals to provide credit facilitation, skilling, and recruitment services to MSMEs. There are more than 6.5 crore MSMEs in India and majority of them are in the unorganized sector and hence there is no credible data on how many of these units are affected by the pandemic, how many of them have access to formal credit etc, he said.
The AIAI further suggested that the central government may work with the District Industries Centres in states to prepare a comprehensive database of MSMEs, which include number of workers employed by these units, whether they have access to bank credit, whether they benefit from government schemes etc. Such a database will pave way for a well informed policy decisions and course correction to re-design schemes based on the unique challenges faced by MSMEs.
On the GST front, the Union Budget has removed provisional credit of input tax, which is a cause of concern as this will put onus on recipient of intermediate goods to ensure that sellers file their returns properly without errors, AIAI said. If the seller makes any error in filing their returns, the recipient may be denied input tax credit for the tax paid while procuring goods for no fault of his or her. Therefore, the government may reconsider this amendment, AIAI added.
