Even as micro, small and medium enterprises (MSMEs) in several parts of the country are staging protests against increasing input costs of key raw materials, industry bodies grouped under Consortium of Indian Associations (CIA) has sought the establishment of ‘raw material ration cum fair price shops’ across India at every industrial estate.
The MSMEs want such shops to supply raw materials like steel, aluminum, copper etc at fixed price. The demand forms part of a 15-point pre-Budget submission made by CIA to save MSMEs from ‘imminent closure’. The twitter handle of CIA has tagged Prime Minister’s Office, Finance and MSME ministers and opposition party leaders like Rahul Gandhi to its budget submission post.
The CIA also wants state and central governments to offer a preferential price that is 25% more than the lowest quote for all micro enterprises in government tenders.
The 15-point agenda calls for the creation of a separate office of the Development Commissioner for micro enterprises to look after their exclusive needs. It wants to convert all outstanding working capital loans availed by MSMEs into a term loan, with a one-year moratorium for repayment. The body also seeks fresh working capital at Reserve Bank’s repo interest rate for up to two months.
The CIA further seeks 100% depreciation on all capital purchases done by MSMEs through any period of the year. As a onetime measure to boost demand, the industry associations suggest exemption from income tax (upto ₹10 lakh annual income for individuals and ₹50 lakh from MSME profits).
Exemption from capital gains tax on industrial assets sold to repay loans or reinvest in business for 2 years; a designated bank to every 'startup’ to support financial needs at a concessional interest rate without insisting any security for three years; permission to bank managers to offer additional loans up to ₹2 crore without any approval from superiors and decision to be conveyed within 10 days of application, etc are part of the 15-point wish list.
CIA is a group of over 30 trade bodies and regional MSME associations, a significant number of them, from South India.
