Corporate Tax Reduction, CapEx Cycle and skilled employees are the immediate needs of MSMEs: Economist (Watch Video)
New Delhi, Jan 25 (KNN) Reduction in Corporate Tax Rates in the upcoming Union Budget is one of the most prominent demands emerging for and from the MSME sector.
Not only industry and industry representatives, but also the eminent Economists are expecting the Finance Minister to reduce the tax burden for the micro, small and medium enterprises (MSMEs) to give them some relief.
KNN Spoke to Manika Premsingh, Economist and Founder, Orbis Economics. She made three suggestions for consideration in the Union Budget which would boost the MSME segment. (Watch Full Video)
Premsingh said, “There are already talks about corporate tax rates being declined. That is definitely a welcome move for businesses all across for various sizes of businesses. This is particularly good for the MSME segment. In fact there could be some sectoral specifications in this regard. The sectors which have been suffering could benefit from the tax breaks.”
Further, the Economist suggested that there is a need to get the CapEx Cycle going again.
Capital expenditure, or CapEx, is funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm. This type of outlay is also made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building, to purchasing a piece of equipment, or building a brand new factory.
On this Premsingh said, “India’s Capex cycle has been very sluggish for the past few years and since the MSME segment accounts for about 45% of industrial production in the country today and there is a push from the centre in order to make Make in India happen and that critically involves the industry, this would be a good idea to allow more CAPEX to take place.”
Finally, elaborating the third suggestion she has, she said, “The MSME segment is the big employer in the country today and the India story is critically dependent on the demographic dividend. In order to harness this it is essential that enough jobs be created in India. For that there is a need for appropriate skills at provision.”
The Union Budget will be unveiled on February 1 this year unlike previous years. Despite appeals from the opposition, the Supreme Court said there is no valid reason to defer the Budget as it would not impact Assembly Elections to be held during the same period in some states. (Watch Full Video)