Budget 2012: Did not simplify rules for MSMEs | SupportBiz

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Budget 2012: Did not simplify rules for MSMEs

 
Hike in excise duty and service tax will push up a lot of prices, and inflation

The Union Budget did not list any measures aimed at simplifying rules for MSMEs.

“There are too many departments, like ESIC, PF, among others at the centre, that MSMEs have to deal with and something should be done to combine all of these,” opined the Karnataka Small Scale Industries Association (KASSIA) president Prakash N Raikar, in his post budget reaction to SupportBiz.

Furthermore, Raikar said that the key area of industrial infrastructure was also neglected in Budget 2012-13. “The Finance Minister spoke of an INR50 lakh crore allocation for the infrastructure sector during the 12th Five Year Plan. But how much money will the government pump into infrastructure development this year or next year? What about industrial infrastructure? The government needs to specify,” he said.

While Raikar welcomed the move to setup up an INR5,000 crore early stage fund with the Small Industries Development Bank of India (SIDBI), he felt that infusing “clean equity” into SIDBI would enable the bank to lend at lower rates, lesser than that of public sector banks. On bank rates, he said that MSMEs expected a four percent cut, bringing down rates to 12%. “But that did not happen.”

The hike in excise duty and service tax will push up a lot of prices, and inflation, he added.