December 22, 2021 / 14:15 IST
With rising commodity prices, FISME wants the abolition of import duties on steel, copper, aluminum and polymers.
(Representational Image; Source: ShutterStock)
The Consortium of Indian Associations (CIA) has sought creating a separate Development Commissioner to and look after exclusive needs of micro enterprises in the upcoming Union Budget.
The government has kickstarted consultations with industry bodies for Budget 2022, and has sought suggestions from industry and trade bodies as a precursor to the Finance Bill 2022.
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Every year, the Budget is keenly followed and this year will be no different. While the recovery continues from two COVID-19 shocks, the small business sector has also been severely hit due to the increased freight rates, high costs of raw materials and coal shortage.
The Micro small and medium enterprises (MSME) sector in India is said to be the second-largest employment creator after agriculture, providing jobs to an estimated 11 crore people. It contributes 30 percent of the GDP and accounts for 48 percent of the exports.
The CIA has recommended that the government should establish raw material ration cum fair price shops in order to supply raw materials such as steel, aluminum and copper to MSMEs at a fixed price.
According to All India Council of Association of MSMEs (AICA), prices of raw materials such as middle steel plate, aluminum alloy, copper, cold-rolled close-annealed sheet, pig iron, mild steel scrap, kraft paper and engineering plastic, among others, were 37-155 percent higher in October 2021 compared to April 2020. The rates for aluminum alloy, copper and kraft paper have shot up 155 percent, 119 percent and 110 percent, respectively, during the same period.
It has further urged that the all outstanding working capital loans availed by MSMEs be converted into a term loan with 1 year moratorium and government should provide fresh working capital at repo rate.
It also recommended that micro enterprises with turnover upto Rs. 5 crore be exempted from Goods and Service tax (GST) for a period of 12 months and the NPA (Non Performing Asset) norms for the micro enterprises are reclassified as 120 days from the date of missing of an EMI.
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