SME sector seeks more sops in Budget 2014-15

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SME Times News Bureau | 07 Jul, 2014
Apex industry bodies have urged the government to give more encouragement to the micro, small and medium enterprises (MSMEs) in the Union Budget 2014-15.

"The SMEs are the backbone of the Indian economy and there is a need to address their concerns on an urgent basis to ensure a conducive business environment," said R. Narayan, Founder & CEO, Power2SME.

To enable them to continue scaling up, timely and adequate access to funds is critical, which has traditionally been one of the biggest hurdles. The Government should strive to create a favourable environment for SMEs that curbs the need for debt and capital.

"Also, there is a need for reduction in the interest rates. SMEs continue to pay interest rates of 19-20 percent for bank loans. Delayed payments have also been an area of concern for SMEs that contribute to reduced working capital for SMEs," he said.

"To address payment issues, the Government could establish an automated portal wherein SMEs provide details of customers they supply. In case of payment defaults, the Government can send automated reminders to defaulting establishments," added Narayan.

In a budget wish list, Indian Direct Selling Association (IDSA) has asked government to create a conducive environment to attract more FDI in the country which will create more employment opportunities.

"We need to incentivise setting up of micro, small and medium enterprises in Tier II and Tier III cities to boost Trade and Commerce Activities in the region. It will create a competitive level playing field with other emerging economies," said IDSA secretary general Chavi Hemanth.

The association also asked the government to implement the Goods and Services Tax (GST) reforms.

"To keep the faith of so many industries and to simply the tax structure, rapid implementation of uniform GST is needed in order to decrease compliance burden for Businesses as well as reduce paper work while making tax system simpler and transparent," she said.

The direct selling body further asked to stabilise price of food items, continue with the gas subsidy, provide more grants to the milk industry and modernize rice industry.