Finance Minister presented MSME-friendly Budget: KASSIA
MSME industry body says voluntary vehicle scrapping policy will give a push to auto sector
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The Union Budget 2021-22 has come like a shot in the arm for MSMEs, with Finance Minister Nirmala Sitharaman announcing various measures to help the beleaguered small industry, such as doubling the allocation for MSMEs to Rs 15,700 crore from last year, boosting domestic manufacturing of MSME products by increasing customs duty on certain items and also rationalizing exemption on import of duty-free items as an incentive to exporters of garments, leather and handicraft items, said Karnataka Small Scale Industries Association (KASSIA).
"We laud the FM for incorporating many suggestions made by industry bodies like KASSIA," said KB Arasappa, Association's president.
"With the cut in margin requirement from 25 to 15 per cent, the Budget will increase credit outflow under Standup India to SC/STs and women entrepreneurs. The setting up of seven textile plug and play textile parks near seaports, airports, railways and dedicated freight corridors (DFC) will enhance exports, while the allocation of Rs 1.97 lakh crore for production linked incentive (PLU) schemes covering 13 sectors will kick-start domestic manufacturing," he said.
The voluntary vehicle scrapping policy will give a push for the automobile industry, and the phased manufacturing plan for solar cells and solar panels will widen the scope for renewable energy, he added.
KASSIA also expressed its happiness at the push for Bengaluru Metro Rail Phase 2A and B and also in kick-starting the Bengaluru–Chennai expressway: of 278 km, which is set to take off with construction beginning this year.
KASSIA lauded the plan to set up a bad bank modeled on the lines of an asset reconstruction company which will clear hurdles in lending to MSMEs, and also welcomed the changes to the definition for small companies under the Companies Act which will ease compliance burden. Further, the consolidation of securities laws and existing de-criminalization of offences under the Companies Act marks an important move towards making Indian corporate legal framework simpler, business friendly and ultimately reduce compliance costs, it said.
The extension of ESI cover to all categories of workers and proposed amendment to Apprenticeship Act and allocation of Rs 3,000 crore for realignment of existing National Apprenticeship Training Scheme (NATS) towards post-education apprenticeship, training of graduates and diploma holders in engineering, are also commendable, it said.
Welcoming the extension of tax holidays and extension of capital gains tax exemption for startups by one year until March 2022, KASSIA expressed the hope that the special framework for MSMEs to be shortly unveiled by the FM will add to the feel-good vibe of the budget.
