FICCI budget memo recommends Rs 5 cr collateral free loans for MSMEs
New Delhi, 13 Jan (KNN) The Federation of Indian Chambers of Commerce and Industry has recommended the government for the budget to consider increasing Collateral free loans under CGTMSE from the existing INR 2 crore to up to INR 5 crore.
It has suggested this to provide ease of access to finance for MSMEs.
To ensure timely payments to the MSMEs, it is suggested that there should be automatic publishing of GST registered MSMEs’ invoices on TReDS, and these should be deemed accepted and payable by banks, once the date for acceptance or rejection by the buyer is over, said FICCI.
To give boost to housing sector, it has pointed out that the sector needs to be provided holistic support in the upcoming Union Budget. An interest subsidy of 3-4 per cent on housing loans could also be offered for a period of 3-4 years.
It also suggested to offer regular subsidy to PMUY beneficiaries for incentivising cooking gas usage
To resolve issue of non-fund credit to Infrastructure sector, FICCI stated that the Industry has a problem with non-fund-based credit.
The major problem relates to bank guarantees, in the way such BGs are required by clients, the way they are issued by banks, and most importantly, the way they are extinguished.
This is adding unnecessarily to project costs and will be the single biggest obstacle to rapidly completing construction under the NIP.
Typically, 20% of the project cost is locked up in BGs that extend into over 4 to 10 years.
Hence, if the NIP is targeting INR 40 trillion in FY 21 and FY22, then BGs of INR 8 trillion would have to be taken by the private sector only in 2 years. It is time to go for Revolving BGs or Insurance Surety Bonds, said FICCI.
In view of promotion of Green Technologies across sectors, it has suggested govt to Extend Concessional tax rate of 15% to companies which invest in Green technologies on or after a specified date.
And allow full deduction towards investment/purchase of green technology assets which will encourage replacement of obsolete technology with green technology.