Trade bodies expect GST rationalisation, easier bank credit and increase in public expenditure in the upcoming union budget | The Financial Express

Trade bodies expect GST rationalisation, easier bank credit and increase in public expenditure in the upcoming union budget

Credit and Finance for MSMEs: Federation of Indian Micro and Small & Medium Enterprises (FISME) asked for government intervention by setting up a joint committee that consists of the Reserve Bank of India (RBI), banks and stakeholders to develop a unique rating model for MSMEs, which focuses singularly on solvency.

Trade bodies expect GST rationalisation, easier bank credit and increase in public expenditure in the upcoming union budget
In response to the letter, the forum shot off another letter on Friday and stated that the CTUs therefore have decided to boycott the proposed video conference.

Credit and Finance for MSMEs: The infrastructure sector has requested for rationalisation of Goods and Services Tax (GST), accessible bank credit and an increase in public expenditure at the pre-budget meeting with the Finance Minister Nirmala Sitharaman as per a report by the Press Trust of India (PTI). 

Sitharaman on Monday began pre-budget consultations by holding virtual meetings with industry chamber heads and infrastructure experts on their expectations from the upcoming budget for the next financial year.  

Also Read: Budget 2023: MSMEs tell FM Nirmala Sitharaman how to improve access to bank loans

The MSME industry body, Federation of Indian Micro and Small & Medium Enterprises (FISME) called attention to the bank loan rating (BLR) requirement which puts restraints on the growth of MSMEs. It asked for intervention by setting up a joint committee that consists of the Reserve Bank of India (RBI), banks and stakeholders to develop a unique rating model for MSMEs, which focuses singularly on solvency.

FISME suggested intervention after observing that some private banks levy  pre-payment penalties (of four per cent) on MSMEs who change banks if they are unsatisfied with their poor services.Therefore, the industry body urged to form a task force to study the extent of the issue and suggest remedial measures in a time bound manner.

Another industry body, PHD Chamber of Commerce and Industry (PHDCCI) proposed that infrastructure investments in the country shouldn’t be less than 10 per cent of the GDP if India were to become a developed economy by 2047.

Besides, the trade association, Confederation of Indian Industry (CII) called for setting up a separate Special Purpose Vehicle (SPVs) in the infrastructure sector to execute individual infrastructure projects due to the mandate of tender conditions issued by the National Highways Authority of India (NHAI).

Further, the Cellular Operators’ Association of India (COAI), a telecommunication focused trade association, sought a reduction of levies and taxes on the telecom sector amid new 5G networks and services rolled out across the country. 

“…our demand for cost reduction should be looked at expeditiously,” asked SP Kochhar, Director General of COAI after the online meeting of the infrastructure industry experts with the Finance Minister.

In addition to that, the telecom industry has also called for rationalisation of GST, reduction of licence fee to one per cent from the current three per cent and lowering of customs duty on equipment. Telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea are counted as the COAI members. 

Also Read: Budget 2023: NBFC body FIDC urges FM Sitharaman to treat MSME loans differently from corporate loans

Furthermore, the representatives of the auto industry expressed that the government’s support is needed for long-term policies to establish India as a strong electric vehicle (EV) manufacturing base, as per the sources. EV companies sought government’s support for reskilling of the workforce. 

Union Ministers of State for Finance Pankaj Chaudhary, Bhagwat Kishanrao Karad and other senior officials also attended the virtual meeting.

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First published on: 22-11-2022 at 19:25 IST