New Delhi, March 2 (KNN)  While hailing the budget as growth oriented and reformist, MSMEs cannot hide their disappointment from the first full Budget of Arun Jaitley as the sector feels that its concerns have been largely left unaddressed.

President of Federation of Indian Micro and Small & Medium Enterprises (FISME), Dr. D. Gandhikumar has said that the Budget contains many path breaking initiatives such as steps to curb black money, expanding social security coverage by proposing inexpensive health, accident, pension and life insurance for all and addressing concerns of investors in infrastructure.

However, once again the largest employment creators in India- the MSMEs, have been relegated to the periphery of Budget pronouncements. 

“Whether it is providing investment allowance or income tax benefit for employing more people or addressing pains of accepting deposits from friends and relatives which the new Companies Act has termed as illegal, MSMEs’ concerns have once again failed to attract the attention of the Finance Minister”, Gandhikumar said.   

Thanking the Finance Minister for considering the demand for providing an option to employees to choose alternative mechanism of  ESI and PF,  he assailed the move to hike import duty on steel by 5% which according to him would  render a large number of user MSMEs uncompetitive.

“Iron and Steel, Copper, Aluminum and plastic raw materials are the building blocks of industry, hiking duties on these raw materials while keeping level of duties constant of finished products leads to instances of inverted tariff and hurts user industries especially MSMEs”, he added. 

FISME has highlighted several pain points of which the MSME sector expected Finance Minister to take cognizance but those have been ignored namely:

• The threshold of investment allowance to be brought down from Rupees 25 crore to zero so that MSMEs can also take advantage of it
• Policy initiatives and financial commitments to deepen Credit Guarantee for MSMEs, Factoring, SME exchanges, SME Banks among others  
• Fiscal incentives to MSMEs also for employing more people
• Allowing MSMEs to accept deposits from friends and relatives  by providing an enabling clause in the Companies Act
• Rationalization of inverted tariff by reducing import duties on raw materials/ inputs and hiking tariff wherever possible on labour intensive manufactured products  to encourage ‘Make in India’
• Action on Kamath Committee report on financial architecture for MSMEs
• Insolvency mechanism for MSMEs and individual (KNN/AB)