KASSIA submits Pre-Budget Memorandum to State Chief Minister addressing the major Concerns

New Delhi, Feb 3 (KNN) Karnataka Small Scale Industries Association (KASSIA) President R.Hanumanthe Gowda has submitted a Pre-Budget memorandum to state Chief Minister Siddharamaiah addressing major concerns and issues of MSMEs in the state and suggesting certain necessary measures to overcome these challenges.

KASSIA has demanded creation of separate directorate in order to improve service of this sector and speedy implementation so as to bring major issues and concerns of the MSMEs in front.

KASSIA cast a light on important issues of Government Procurement Policy and Practices of different government undertakings such as BESCOMs, KPTCL, KSRTC, BWSSB and the many others. Their step-motherly treatment to the state based SMEs obstructs the growth of SMEs in the state.

He said “they are lukewarm in their approach ignoring the provisions of 15% price preference as per the new industrial policy-2014-19 which often go against the micro and small manufacturing units in the state.”  To this he suggested that the Government must issue enabling notifications wherever relevant including the price preference so that the entrepreneurs can take the benefit.

Further he bring to the fore the crucial issues of Financial Constraints which include complex collateral requirements, cumbersome procedures and delays in disbursement, procedural delays in sanctioning term loans, high interest rates on term loans, high transaction costs and non-availability of alternate finance due to which it become difficult for MSMEs to access credit.

Maximum of the micro and small enterprises are unaware of the ongoing schemes and rest finds it difficult to access the benefits of scheme due to above mentioned constraints.

On power supply related issues like inadequate capacity, lack of coal, maintenance downtime, and routine breakdowns especially in rural areas, he requested the government to take necessary measure  to insulate industry, especially the SMEs by incentivizing captive generation, use of non renewable energy, wherever feasible and import of power to reduce the gap.

He also suggested capacity additions to bridge the gap of increasing demand growth and reduction in power tariffs for SMEs in order to make them competitive.

He said “the Government should consider revising the definition of LT Category of power supply to include loads up to 100 HP/75 KW under the LT category as now prevails in the neighboring states. Karnataka now considers loads above 66 HP / 50 KW under HT.

The next grave challenge for the state MSMEs are inflexible labor laws, low labor productivity, limited capacity to pay and lack of skilled labor. In light of this he urged the government to focus on skill enhancement schemes and competency development, flexible labor laws and minimum wages and formulation of separate minimum wage structure for SMEs so that unskilled labor can extract the benefits.

He said “SMEs provide the training ground for unskilled and semi skilled from the deprived sections of the Society.  Therefore SMEs must be subsidized up to 25% of the minimum wages in the first year on such employees, perhaps placing a cap on the number of employees”.

He also brought in notice the high level of property tax at panchayat level as compared to city corporation like Bangalore and wants downward revision of property tax.

For women entrepreneurs he lauds the government initiative for increasing the cap of funds to Rs 2 Crore at 4% by KSFC. Due to in availability of adequate funds to deserving women he demanded the increased allocation of funds for women entrepreneurs at 4% and special focus on women entrepreneurs in for economic growth.

He further made a request that a special financial provision of Rs.500 crores be made to  improve infrastructure  in the private industrial estate in the State and Formation of industrial township and estate for infrastructural development and establishment of new industrial estate under by industry associations.

He requested KSSIDC not to lease out/rent unsused KSSIDC Godowns as they can be used to store the sand or meet the demands of SSIs for raw-materials etc., which are likely to increase in the coming days.

He also suggested “the Government must take steps to clear the applications for land allotments so that the entrepreneurs can proceed with the investments and projects which benefits the state and the people”.

Extension of Udyami Snehi Baghya and Kara Samadhana Scheme in order to extract the benefits of schemes as many of them not utilized it properly.

He also lauds the government for providing grant of 5 crores and 4.5 acres of land to establish Lassia centre of excellence and innovation project.

He said “KASSIA being a not for profit organization, we request the Government to further sanction a grant of Rs.4.5 crores to KASSIA to enable us to complete the project for the benefit of MSMEs in the State”.

He requested the government for SMEs representation in legislative council as SMEs is the engine of economic growth.

He further stated that “SMEs inability to support the project with funding, we request that the State Government may kindly explore avenues of supporting the project by funding the 20% for the benefit of the MSMEs under 4.0 IOT”.

Last  but not the least, the complex and cumbersome process of GST which is creating a lot of hindrances in the growth path of MSMEs. Issues like filing to many returns, input credit problem, ill equipped GST grievances, and disparity in GST rates etc, so requested government to look into this matter and bring some uniformity in GST tax structure. (KNN/YV)