FISME added that there is an urgent need to introduce tax breaks to promote investment in capital goods on the same lines as depreciation and thereby generate employment.Team SMB
The Federation of Indian Micro and Small and Medium Enterprises (FISME) has suggested measures to be incorporated in the upcoming Union Budget 2019-20, which would bring fiscal reforms to check the liquidity crisis in the MSME sector, reported KNN India.
The apex body of MSME associations in the country submitted a pre-budget memorandum to Finance Minister Nirmala Sitharaman which proposed creating a multi stakeholder agency and bringing all listed companies on TReDS.
Earlier this week, the Finance Ministry led by Nirmala Sitharaman was said to be considering fiscal incentives such as interest rate subvention and lower tax rates for up to certain turnover threshold for key MSME sectors. The ministry was also expected to be keen on boosting employment and exports for MSMEs.
But the multi stakeholder agency proposed by FISME will be dealing with big data of GST, bank transactions and ROC filings based on which it would automatically create credibility report of companies.
FISME also recommended making TReDS more effective and broad-based, so that all listed companies may be asked to upload their bills.
FISME added that there is an urgent need to introduce tax breaks to promote investment in capital goods on the same lines as depreciation and thereby generate employment. The current dispensation excludes most MSMEs from taking advantage of investment allowance, it said.
While FISME is focussing on resolving liquidity crunches, the MSME Ministry, Commerce Ministry, and Federation of Indian Chambers of Commerce and Industry (FICCI) are stressing on the issue of job creation in the MSME sector.
First, MSME Minister Nitin Gadkari said Prime Minister Narendra Modi is expecting employment to increase in the MSME sector. Following this, Commerce Minister Piyush Goyal supported greater participation of MSMEs in developing countries both in domestic and global trade, as they are crucial for jobs and income generation, on which the livelihood of millions is dependent.
Later, FICCI President Sandip Somany made a case for creation of a separate ministry for employment to effectively coordinate efforts to generate jobs. Somany termed it one of the key challenges for the new government.
With suggestions for boosting the MSME sector coming in from various sources, the Budget is widely expected to take steps to bolster consumption and job creation.