Free SMEs from funding woes

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: minister. Such as, graded taxation for companies on the basis of slabs of income, as that would facilitate the transition of informal SMEs to become companies and improve their ability to access capital. More than 90% of SMEs tend to remain partnership or proprietorship entities due to the high compliance cost of the Companies Act—the prospect of a higher slab of income tax once they become companies deters most. FISME is also hoping that small enterprises may be exempted from the fringe benefit tax. In terms of labour laws, FISME feels that a large number of states follow a flawed mechanism of determining minimum wages based on sectors in which a worker is employed. A worker, therefore, in the engineering sector is entitled to a different rate than the one in the food-processing. So, the economic criteria for minimum wage need to be rationalised.