FISME Pushes For Financial Reforms To Support MSME Growth

ENA MSME 2025-01-02 13:31:29 New Delhi, Jan 2 (KNN) Leading industry associations representing India's micro, small, and medium enterprises (MSMEs) have submitted comprehensive budget recommendations focusing on regulatory relief and improved financial access. The proposals aim to address key challenges facing the sector, which plays a crucial role in the nation's economy. The India SME Forum, representing over 98,200 MSMEs, has proposed exempting businesses with turnovers below Rs 5 crore from routine audits and inspections, reserving such oversight for cases with significant discrepancies. The organisation also advocates for a more lenient approach to compliance, including a formal error-forgiveness program for minor GST-related infractions and simplified processes for reinstating canceled GST registrations. To streamline payment systems, industry bodies have recommended integrating the Trade Receivables Discounting System (TReDS) with the GST framework and Government e-Marketplace (GeM) portal. This integration would enable automatic flagging of unpaid invoices on buyers' GST portals after payment deadlines expire, following recommendations from the Standing Committee on Finance led by Jayant Sinha. The Federation of Indian Micro and Small & Medium Enterprises (FISME) has highlighted critical concerns regarding the Special Mention Account (SMA) framework, noting that the current system often leads to business closures rather than revival. The organisation emphasises the need for comprehensive guidelines focused on rehabilitating struggling enterprises rather than merely identifying stressed accounts. FISME has also proposed reforms in banking practices, suggesting a shift toward need-based financing that incorporates cash flow analysis. The organisation advocates for reduced collateral requirements for MSMEs demonstrating consistent financial responsibility, arguing that this would enable businesses to reinvest in growth while maintaining fiscal discipline. The recommendations come at a significant moment as India's services exports surpass merchandise exports for the first time. With MSMEs contributing approximately 50 percent of goods exports, FISME has urged the EXIM Bank to revise its lending criteria, particularly the requirement that exports must constitute more than 10 percent of total sales. The organisation suggests maintaining a more reasonable threshold to support emerging exporters, especially for letter of credit-backed orders. (KNN Bureau) 40473 https://knnindia.co.in/news/newsdetails/msme/fisme-pushes-for-financial-reforms-to-support-msme-growth 2025-01-02 13:31:29 knnindia.co.in FISME Pushes For Financial Reforms To Support MSME Growth