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Budget 2020: Less compliance burden, more trust on entrepreneurs will be real ease of doing business

Budget 2020 India: The tax rebate should be given to partnership firms also. There should be a time limit for issuing NOC or any other compliance matter.

Budget Speech 2020 PDF Download Link
Check Budget Speech 2020 PDF Download Link

By Manguirish Pai Raikar

Union Budget 2020 India: The current GST system has some compliance issues for MSMEs. One such issue is that you cannot take corrective measures if there is a mistake while feeding the columns. This, as informed, would be made possible from April onwards. Secondly, it was pointed out that those who register and try to comply to the best of their ability are harassed by issuing notices and invoking punitive actions. A simple example is in case of inability to display the Registration Certificate and the GST Number; the entrepreneur is made to pay a fine. It was suggested that since this is a trust-based system, the registered dealer should be advised, guided, and assisted in complying with the system which is new and that changes are incorporated on a continuous basis. The officials should be harsh on those who are evading rather than those who are complying.

The same holds good for the Income Tax authorities also. There are notices issued without any reason just to show that they are trying to increase government revenue. Such officers should be made personally responsible for punitive action for any wrongful act and that vigilance action also should be quick.

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The tax rebate should be given to partnership firms also. There should be a time limit for issuing NOC or any other compliance matter. It was suggested that to motivate youths towards entrepreneurship the same benefits as those given to startups should be given to micro and small units as well.

The new labour bill consisting of four codes needs to be implemented as early as possible to reduce paperwork and also have equal protection to the workforce as well as the employers. The archaic form of planning and statistics should be simplified with one-page form. The customs clearances, as well as sealing of containers, should be time-bound and without any hassles. A portal should be created so that the activities can be tracked and also the time taken be determined. The procurement mandated by the government should be strictly monitored and adhered to without compromising on quality aspects.

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Another issue was need-based finance. Some banks are not honouring the government schemes like CGTSME and are insisting on a collateral guarantee. It has been found that funds, when needed, are not made available to MSME units and are classified as high-risk units without taking into consideration the CIBIL score of the running unit. Further, when any export order is received, which is always in bulk, additional funds are not made available in time even with a confirmed order in hand.

It is apparent that doing business in India is complex with red-tapism, multiple forms, multiple authorities, multiple regulations, and acts which makes it impossible to focus on the core activity of manufacturing, growing business or improving quality of product or service. We are losing out to other nations as we are not able to organise trade and commerce efficiently. A single window with simplified regulations was expected but it seems to be only adding to the complexities to business. A creative conducive ecosystem for growth should be the government’s focus and can be achieved if the ministries work alongside with the entrepreneurs and the startups.

Manguirish Pai Raikar is the Chairman – MSME at Assocham National Council. Views expressed are the author’s own.

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