ASSOCHAM states wish list ahead of Budget
Kolkata/UNI: The Associated Chamber of Commerce and Industry (ASSOCHAM) on Wednesday said it was looking forward to some bold measures in key areas of concerns from the upcoming budget for it to be able to play a galvanising role in the economy and help achieve the target of a $5 trillion economy in the next few years.
ASSOCHAM president Dr. Niranjan Hiranandani said concerted efforts by Prime Minister Narendra Modi in his outreach to wider sections of the industry and other key stakeholders, fiscal incentives and sustained public investment on infrastructure will lead to a spur in demand.
'It will be big catalyst for reviving the growth momentum in the economy. However, the industry has certain expectations and hopes on various fronts from the upcoming budget for it to be able to play a galvanising role in the economy and the nation’s development at its full potential and also help achieve the larger target of a $5 trillion economy in the next few years,' the ASSOCHAM chief said in a statement mailed to UNI here.
As per Dr. Hiranandani, Industry Inc. was looking forward to some bold measures in key areas of concerns which are as follows:
1. Ease of Doing Business - Though India’s ranking in Ease of Doing Business has improved at the national level, many states need to catch up by addressing ground level constraints and simplifying the approval process. India needs judicial reforms which can help in greater contract enforcement in the country. Also needed is faster allotment of land / sheds / warehouse obtained from government (fix timeline, online tracking of application, including Surrender of land). Digitization of land records is a long pending issue and we recommend a time bound policy for digitization of land records.
2. MSME Sector - MSMEs are the front end of the economy and reflect the picture of overall health of our country. However their viability has been hit on multiple ends such as High Cost of Capital, Poor Credit access, Poor infrastructure, Lack of connectivity to the market etc. 'We should have dedicated index of MSME’s Ease of Doing Business. The reduction in income tax rates announced by the Government for corporate entities should also be extended to all MSMEs registered as Proprietary or Partnership concerns. MSMEs that provide high level of employment should be given financial incentives or specific tax rebate which can be linked
to the new employment created by them,' he said.
MSMEs face problems of delayed payments from the buyers. Further, MSMEs hesitate to enforce the legal provisions available to them under the MSMED Act due to their low bargaining power. It is recommended that amendment should be made in the MSMED Act requiring all MSMEs to mandatorily upload all their invoices above a specified amount to an Information Utility.
A monitoring authority should be set up to facilitate the MSMs to get their payments from such buyers. Section 54 of the income Tax Act for granting exemption on investment of Capital Gain should be expanded to include all investments made in industry/businesses out of any kind of Capital Gain generated.
In the budget 2019, investments made in start – ups out of Capital Gain had exempted.
We recommend that investments made in all MSMEs out of Capital Gain should be exempted from Income tax. As in case of Infrastructure Finance Companies or Micro Finance companies, Special NBFCs for MSME financing should be established in the country to exclusively finance the MSMEs and such lending should be categorized as priority sector lending.
3. Manufacturing - Import substituting products, which attract new investments for manufacturing in India, should be kept outside the ambit of free trade agreement.
Industries generating employment of 50 people & above for every 1 crore of investment, should be treated as high priority sector. Encouragement is needed for industries investing in adopting digitization of operations by giving interest or capital subsidies on systems and equipment. There is a need to recognize companies having 20% + women employment, by providing overall tax rebate of 1%.
4. Export Competitiveness - To improve export competitiveness there is greater requirement of stability in policy for at least 3-5 years. Industry is eagerly waiting for the interaction on the new scheme- Rebate of State & Central Taxes and Levies Scheme (RoSCTL). For competitive interest rates for exporters Govt’s intervention is required, to avoid the ongoing delay in implementation. Infrastructure sector has a big role to play in achieving the target of $ 5 trillion dollar economy. Post ILFS bond market has not improved. We need to have market for long term bonds, where pension funds can invest.