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FISME demands removal of protectionist measures during pre-budget consultation with Finance Minister

Updated: Nov 26, 2016 12:34:58pm

FISME demands removal of protectionist measures during pre-budget consultation with Finance Minister

New Delhi, Nov 26 (KNN) While the aftershocks of demonetisation dominated the pre-budget consultation meeting chaired by Finance Minister Arun Jaitley, the Micro Small and Medium Enterprises  (MSME) sector demanded rollback of protectionist measures such as Minimum Import Prices and Safeguard duties on Steel and Aluminium.

Raising the issue with the Finance Minister, Dr Sangam Kurade, President of Federation of Indian Micro and Small & Medium Enterprises (FISME)- the largest SME body in India, said , “while the intention of the Government may be to support  the domestic steel and aluminium industry to be viable,  these measures are causing enormous damage to the user down-stream industries chiefly MSMEs, by making their products uncompetitive in both domestic and export market due to high cost of the basic metals”.

FISME has said that while the steel lobbying groups had brought in the bogeyman of potential threat of NPAs because of import of steel to push for drastic measures such as MIP and safeguard duties, the aluminium industry did not have even a phoney argument to demand protection.  It is sad Government has yielded to such pressure tactic of lobbyists.

“Government should constitute a consultative machinery including the MSME sector, to capture the concerns of  all stakeholders before  imposing such protective measures”, Dr. Kurade demanded.

On demonetisation FISME has cautioned that it might  take 5-6 months for the normalcy to return in cash supply market and the disruption for the period was enough to inflict collateral damage to MSMEs and consequently to employment if remedial steps were not taken urgently.

In a detailed memorandum submitted to the Finance Minister, FISME has suggested several measures for monetary expansion such as enhanced the asset leverage, reduction  in interest rates by 250-300 basis points, guided fall of the rupee exchange rate and injecting  a stimulus through enhanced Government expenditure. 

FISME has also made an interesting suggestion to curb theft of Excise and VAT in supplies made to public service providers/ utilities through the GSTN network. 

FISME memo says that a large number of public utilities including power, water, municipalities, Government departments as education, police etc, make huge quantum of purchases and pay GST. But as they are not registered in GSTN, unscrupulous elements have ample opportunity to siphon off government revenues.

FISME has suggested that all it should be mandatory for all such agencies to enter their purchase transactions in GSTN irrespective of the fact that they have no use of GST paid by them/claiming refund, while making purchases. Ideally, in maximum number of such cases and wherever possible- for example in case of power companies, GST may be made applicable on electricity so that a self-checking chain is built by itself. (KNN Bureau)


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