Industry body PHD Chamber of Commerce sought simple credit facilities for MSMEs
Pradeep Multani, president of PHD chamber of commerce and industry, said steps should be taken in the upcoming union budget to ensure uncomplicated credit delivery to the industry, especially for micro businesses, small and medium-sized enterprises (MSME) and reduce business costs. (PHDCCI).
Mr. Multani suggested that reforms should be made to promote the MSME sector due to its significant contribution to the economic and social development of the country.
The president of the industry body proposed extending the duration of the emergency line of credit guarantee (ECLGS) program for another year until March 31, 2023.
On the tax aspect, Mr. Multani suggested reducing the tax for MSME companies operating as a Sole Proprietorship/Partnership as it would benefit the entire MSME sector. For such businesses, it is suggested to reduce the maximum tax rate to 25%, he said.
Mr. Multani said that for new units, the effective tax rate is around 17%. “As a result, we suggest that to allow entities to benefit from Section 115 BAB, the time limit allowed to begin production of a new unit may be extended before March 31, 2025.”
In order to give a great impetus to exports, the PHD Division proposed that export earnings should be tax-free for MSMEs for three years, and large enterprises’ income from incremental exports (YoY) tax-free. This will help offset some of the additional logistics costs and other bottlenecks that Indian exporters face.
He added that the current basic customs duty (BCD) should be reduced by 50% on raw materials for producers, increasing public investment in agricultural infrastructure from the current level of 6% of total. capital formation to at least 10 percent over the next three years at an increase of 1.5 percentage points per year. This will also reduce agricultural waste from more than 25% to less than 10% in the near future.
Speaking of direct taxes, Mr. Multani suggested increasing the tax base by incentivizing taxpayers with lucrative tax-paying benefits such as providing a pension threshold (after retirement over 60) for people pay taxes continuously and honestly. This will increase the tax base in the country.
