FIEO proposes Export Development Fund for MSMEs in Union Budget
The Federation of India Exporters Association (FIEO) on Tuesday urged the government to announce various measures such as employment-linked income tax benefits and an Export Development Fund with a corpus of 0.5 percent of export value for Micro, Small and Medium Enterprises (MSMEs) in the upcoming Union Budget 2019.
For small exporters, it said marketing and showcasing of their products in global markets require substantial expenditure and the current support extended through various schemes is grossly inadequate.
"We require an export development fund with a corpus of 0.5 per cent of export value, so that MSMEs aggressively participates in international exhibitions and trade shows," it said.
Further, the organisation said the Union Budget should encourage domestic manufacturing with a focus on imports substitution.
Last month, MSME Minister Nitin Gadkari had said that the MSME sector offers huge potential and the government is ready to come out with special policies to promote import-substitute products.
FIEO also demanded tax deduction on R&D investments, cut in corporate tax, reducing customs duty on capital goods which are not produced in the country, and higher budgetary allocations for the Department of Commerce in the Union Budget due to be presented by Finance Minister Nirmala Sitharaman on July 5, 2019.
"We would urge the government to provide income tax relief to units which provide additional employment in the export sector," FIEO said, adding that corporate tax reducation may be extended to all entities.
Incentives should also be provided based on twin criteria of incremental growth in exports and workers, FIEO said. "On customs front, the instances of inverted duty structure needs to be looked into," it added.
When the Interim Budget was presented by then-Finance Minister Piyush Goyal in February 2019, he allocated the MSME sector an all-time high Rs 7011.29 crore and also announced an interest subvention scheme for MSMEs, adding that interest relief would be calculated at two percent points per annum for loans up to Rs 1 crore.