Budget 2019: Reduction of corporate tax, digital makeovers for MSMEs to grow, says Assocham
Assocham’s MSME wing focuses on acting as a link between policymakers and the entrepreneurial community to spearhead things in the right direction.
Manguirish Pai Raiker, Chairman, National Council for MSME, Assocham said that some of these incentives are really the need of the hour for the development of MSMEs. “The sector should get a boost by reducing the corporate income tax to 15% (from the present 25%) for MSMEs over a period of 5 years and 20% (from the present 30%) for large companies over a period of 5 years. Digital transformation of MSMEs in which digital architecture for the sector can be leveraged to offer financial and non-financial services such as marketing, technology, branding and vendor support should also be seen,” he said.
Assocham’s MSME wing focuses on acting act as a link between policymakers and the entrepreneurial community to spearhead things in the right direction.
Raiker also is of the view that physical infrastructure development should be looked into by the government where funds are allocated to set up world class infrastructure at national, regional and sector-specific clusters and business centres for MSMEs using the Public-Private Partnership (PPP) model.
The trade body also calls for intensive skill development and training so that entrepreneurs and the workers engaged in the MSME sector can reap the commensurate rewards. “The government should also encourage private skill and training institutions. This can be done via direct incentives and grants to approved training centres offering employee skilling through a range of approved courses. Establishing authorised and certified validation centres to monitor and validate proof of startup concepts can be another significant initiative,” adds Raikar.
To address the capital scarcity in the MSME and startups’ domain, Raikar suggests creating an online crowdfunding platform to ease concerns as a possible alternative. He elucidates on his point further. “Promoting free international mobility of capital and talent to nurture a vibrant startup ecosystem, extending 100% tax rebate on profit for three years in a seven year period (under the Startup India initiative) to 5 years or more and helping startups tide over initial cash flow problems can be integral to their development,” he says.
Implementation of single window clearances in an improved manner to make processes less tedious for MSMEs has also been recommended by the industry body.