As per the GST refunds, unfavourable forex and end of trade privilege to Indian firms, the micro, small and medium enterprises (MSME) sector wants the government give incentives to the upcoming Union Budget so that it can cope with the tough times.
The industry body has proposed to the Finance Ministry to re-introduce some of the pre-GST era incentives and provide cheaper finance to meet capex and working capital requirements. They have also been asked to lower interest cost to 4-5 percent to make the industry competitive.
As soon as the Goods and Services Tax (GST) was rolled out, all the incentives were withdrawn. The duty draw back was reduced, among other things. The government has come out with some incentives. They also expect a lower rate of interest for the SME sector as the cost of finance is quite high this time.
When asked if the much-publicised 59-minute loan scheme for smaller firms had helped, Saxena said that it had met with very limited success, adding that ease of finance is an aspiration of many businesses.
Given that the MSME sector provides employment to a large number of youth, the industry is set to be the focus of the Union Budget.
A Confederation of Indian Industry (CII) survey earlier this year said that the MSME sector created 1.35 crore to 1.49 crore new jobs in the last four years. The additional jobs were created in spite of the negative impact of demonetisation and problems in the initial months of GST roll-out.
