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Posted on Jan 23, 06:02PM | IBNS
The Confederation of Indian Industry (CII) on Wednesday said it has submitted its Pre-Budget Memorandum for the Micro, Small and Medium Enterprises (MSMEs), with the government and other stakeholders.
Requesting for a comprehensive package for Micro, Small and Medium Enterprises to unshackle their growth potential, CII has outlined a 10-point agenda for the MSME sector.
In its statement, CII came out strongly in favor of streamlining the policies and procedures for listing on SME Exchanges, synergising relationship between the small, medium and the large industry and the implementation of the Public Procurement Policy, besides promoting FDI by NRIs in the MSMEs.
Recommending that Large Industry could be entitled to tax benefits subject to the transaction having been completed (including timely payment to the SME supplier, as per the payment terms and conditions, agreed upon between the buyer and the supplier), CII has also called for the extension of the applicability of the provisions of the Public Procurement Policy to the State Government Ministries, Departments and Public Sector Undertakings and its strict implementation by the Central Government Ministries, Departments and Public Sector Undertakings.
To mitigate the problem arising out of Delayed Payments to the MSMEs (and ineffectiveness of the current regulatory framework), CII is of the view that while data may be available, accessing it has been very difficult, considering they are embedded deep inside the PDF documents with the MCA.
With the introduction of XBRL, this process can be streamlined, it said.
As a step towards effective implementation of this rule, there is a need to modify the reporting requirement of MSMEs by asking them to report receivables that they have from the large units, said CII.
With XBRL data, the government can match the data and take immediate action signaling its concern towards MSMEs, as per CII.
According to the CII agenda for MSMEs, creation of different kinds of funds is needed to promote different aspects of MSME.
These include the Branding and Export Marketing Fund for MSMEs and Environment Friendly Technology Fund could be instituted to enhance the self-reliance on energy and also be responsible towards the environment.
There is a need to create to help MSMEs to adopt such branding and technology focused approach, CII said.
There is a need for policy guidelines to encourage FDI participation by NRIs in the SME sector - this would include automatic approval for 100pc FDI from NRIs, and other promotional measures, including a single window clearance, across all subsectors within the MSMEs, said the CII statement.
Among other measures, CII has recommended availability of industrial infrastructure through a corporation that would rent out facilities to MSME; withdrawal of Import Duty exemptions available to foreign suppliers of security features such as security thread; and reinstate the benefits till the policy period 31.03.2014 for the Articles made out of Vulcanized Rubber.
According to Deep Kapuria, Chairman, CII National MSME Council, the MSME segment, which employs more than 59 million persons and contributes approx 40pc to manufacturing output and to the exports, can truly emerge as a growth driver for the economy if the above issues are addressed in a proactive manner.