Assam's mid-segment businesses struggling with high taxes, inflation

Businessmen, traders and contractors in Assam are keeping their fingers crossed as they hope that crucial issues such as high taxes, exclusion from financial schemes and inflationary pressure that are affecting the mid-segment businesses will be resolved by the new dispensation at the Centre after the ongoing Lok Sabha elections. They felt that there would be an adverse impact on the economy if the mid-segment businesses continued to reel under pressure, despite being one of the biggest employment-generating sectors after the railways.

Businessmen and traders, who are from Marwari and Bengali communities in the state, also alleged that the government has "totally neglected" the medium segment of businesses across sectors.

"In the present scenario, the government is focussing on industrialisation. But the medium size businesses are not progressing. The government has not rolled out any scheme targetting the medium scale units," Sivasagar-based garment trader Rupchand Karnani said.

The government claims that many schemes are launched, but when traders go to banks and financial institutions to avail of these facilities, too many documents are sought and finally, they become a failure, he said.

Karnani, also the Sivasagar District Secretary of All India Marwari Federation, claimed that the sales of every trader were down, as compared to the previous years, during the recent Rongali Bihu, which is the main festival of Assam.

"The government also imposed a lot of taxes on us and every year, the rates are increasing. Municipality tax, property tax, licence fee -- all are rising. Rents are also skyrocketing. Staff wages are rising along with the prices of goods. Where from will we pay for these?" he asked.

With voting for Lok Sabha elections in Assam coming to an end, the mid-segment business community is optimistic that a new government at the Centre will look into their problems for long-lasting solutions. Stating that the outgoing government was "only concerned about the rich and small businesses", Karnani hoped that the new government at the "Centre would encourage all sections of businessmen and only then India progress".

"You have to look after the middle-class citizens as well as the business community. The highest sale is in this middle segment. All people do not go to high-end malls for shopping," he said, adding that online businesses have also impacted the traders to a large extent. Telecom contractor Suresh Kumar Berlia seconded him and claimed that the mid-segment businesses are "deprived" of a beneficiary scheme.

"When we go for a loan, they (financial institutions) ask for more collateral than the borrowing amount. If they give us a Rs 50 lakh loan, collateral or mortgage worth Rs 1 crore is needed," he claimed.

Expressing disappointment over the current situation, Berlia alleged that the government waived loans amounting to crores of rupees for big industrialists, but "loan accounts of mid-segment businesses are termed as non-performing assets (NPA) even if a single instalment is misused". "Trading by the mid-segment businesses is the biggest industry after the railways as per my estimation. If the segment gets weakened, everything surrounding these businesses will suffer. Unfortunately, we have never got the due recognition and respect for our service," he added.

However, Berlia does not have much expectation from the new dispensation at the Centre as "all governments go for populist schemes and ignore the mid-segment business community". Gopal Ghosh, who runs a sweet-meat shop at Borjuri in Golaghat district of Assam, lamented that he has applied to several state-sponsored schemes to expand his eatery but has not received any positive response. "High inflation is affecting my business. With prices of all raw materials rising regularly in the last few years, the rates of tea and sweets have also increased accordingly. Sales are also affected," he said.

Guwahati-based hardware trader Sandeep Sharma said online businesses are creating hurdles, which, in a way, are weakening the trade prospect as his shop does not sell products through digital platforms.

"Taxation is a big issue here. The government says everything should be sold with GST, but customers don't want to pay the indirect tax due to increasing rates," he said.

Prices of construction materials have increased manifold in the last few years, but consumers want cheaper rates and are not keen on paying the GST component, the trader said. "However, we bought the goods from dealers by paying GST. So, it's a tricky situation for us. Customers want to buy the goods without paying GST, and it's a loss to us," he added.

Sharma hoped that the new government, after the Lok Sabha elections, would try to rationalise the Goods and Services Tax (GST) along with the enhancement of individual income tax slabs which will provide more purchasing power to the people. He, however, lamented that the government has never looked after the mid-segment business class, and it did not receive any support even during the Covid-19 pandemic.

Vivek Sharma, who looks after his father's restaurant at Titabor in Jorhat district, said carrying out developmental work is a basic duty of any elected government and it should continue irrespective of the party in power.

"The government should work more in controlling the prices. In recent times, increasing prices of medicines and all other commodities are hurting all sections of people, and it is affecting the purchasing power," he said.

Sharma hoped that inflation would be brought down to a minimum so that poor and middle-class families could survive, and also help them spend for different goods. The young businessman also pointed out that labour problems are a challenge and his business faces scarcity of workers sometimes.

The voting of 14 Lok Sabha seats in Assam took place in three phases -- April 19, 26 and May 7. The counting of votes will be on June 4 after completion of the entire seven-phase elections across the country.