Bengaluru, Feb 2 (KNN) Karnataka Small Scale Industries Limited (KASSIA) has hailed the Union Budget 2021-22, announced by Union Finance Minister Nirmala Sitharaman and termed it as historic and Micro, Small and Medium Enterprises (MSMEs) friendly.

It further said that the Union Budget 2021-22 has come like a shot in the arm for MSMEs, with the Finance Minister announcing various measures to help the beleaguered small industry, such as doubling the allocation for MSMEs to Rs 15,700 crore from last year, boosting domestic manufacturing of MSME products by increasing customs duty on certain items like steel screws, plastic ware, finished synthetic gemstones, prawn feed, and also rationalizing exemption on import of duty-free items as an incentive to exporters of garments, leather and handicraft items.

“We laud the FM for incorporating many suggestions made by industry bodies like KASSIA,” said K B Arasappa, President.

“With the cut in margin requirement from 25 to 15 per cent, the budget will increase credit outflow under Standup India to SC/STs and women entrepreneurs. The setting up of 7 textile plug ‘n play textile parks near sea ports, airports, railways and dedicated freight corridors (DFC) will enhance exports, while the allocation of Rs 1.97lakh crore for production linked incentive (PLU) schemes covering 13 sectors will kick-start domestic manufacturing. The voluntary vehicle scrapping policy will give a push for the automobile industry, and the phased manufacturing plan for solar cells and solar panels will widen the scope for renewable energy,” he added.

The industry body also expressed its happiness at the push for Bengaluru Metro Rail Phase 2 A and B and also in kick-starting the Bengaluru–Chennai expressway: of 278 km, which is set to take off with construction beginning this year.

KASSIA also lauded the announcement to set up a “bad bank” modelled on the lines of an asset reconstruction company which will clear hurdles in lending to MSMEs, and also welcomed the changes to the definition for small companies under the Companies Act which will ease compliance burden.

Further, the consolidation of securities laws and existing decriminalization of offences under the Companies Act marks an important move towards making Indian corporate legal framework simpler, business friendly and ultimately reduce compliance costs, it said.

The extension of Employees' State Insurance (ESI) cover to all categories of workers and proposed amendment to Apprenticeship Act and allocation of Rs 3000 crore for realignment of existing National Apprenticeship Training Scheme (NATS) towards post-education apprenticeship, training of graduates and diploma holders in Engineering, are also commendable, it added.

Welcoming the extension of tax holidays and extension of capital gains tax exemption for start-ups by one year until March 2022, KASSIA expressed the hope that the special framework for MSMEs to be shortly unveiled by the FM will add to the feel-good vibe of the budget.