Chennai: To revive the MSME sector beyond Covid-19 times and help it work towards achieving the Prime Minister’s goal of Aatmanirbhar Bharat, the Consortium of Indian Associations (CIA), a group of over 30 trade bodies and regional small and medium scale industry associations, has submitted a list of seven suggestions to the government.
1. Open Ration Shop
The National Small Industries Corporation (NSIC) must implement a PDS like ration card system to micro enterprises for supply of essential raw materials at fair price and in small quantities atleast at Industrial estates/ parks to start with and make them available on credit basis.
2. Abolish Capital Gains Tax
Many entrepreneurs’ only asset is the land and building of the factory or other immovable property. Presently even if they dispose at distress value, they have to pay upto 30 per cent long term capital gain tax to the government.
A longstanding demand of the sector, the Parliamentary Standing Committee on Finance has also recommended that tax on Long Term Capital Gains be abolished for all investments in MSME units.
3. Extend GST Amnesty Scheme till March ’21
To get ‘sale price’ competitive and lowered, exempt GST for all enterprises coming under Micro (upto Rs 5 crore turnover) till March 2021. It will also save micro enterprise owners from going to third party agencies for filing and documentations and allow them to concentrate more on business.
4. Waive interest on gold loans
The government should immediately consider waiver of interest on gold loans and also regulate private gold loan giving pawn brokers to charge reasonably and thrust all PSB to lend on gold loans at zero interest till March 2021.
5. Realisation of outstanding dues payable to MSME
Open ‘trade’ accounts in banks ( like savings and current accounts ) for SME and direct banks to act as intermediary for supplies to corporates, PSU, SU, government ministries and State departments to monitor delay in payments and to ensure settlement on due date to the MSMEs.
6. Job creation for freshers
Provide a stipend of Rs 6,000 per month to every student to undergo six months internships in a SME to help both. All first time job seekers, irrespective of their educational background, should be given a stipend of Rs 6,000/ month each if they go for an internship with a company and this amount should be routed through the enterprises.
7. Prevention of NPA rise
Extend all pending loans by one year with a base interest rate @repo rate on outstanding for this year and charge from 21 April at normal interest as applicable. There shall be No EMI payable till April ’21. All Banks and FI shall be asked to restructure all pending loans, in consultation with the units/ loanees (as the revival period may vary from sector to sector).