With the Centre formulating a new policy for Micro, Small and Medium Enterprises (MSMEs), the Gujarat Chamber of Commerce and Industry (GCCI) has sent a memorandum to the relevant government appointed committee highlighting requirements of the sector. A principal suggestion is to create special banks dedicated to MSMEs, as nationalized banks and private banks are insufficient for the sector’s needs.
“SMEs face a lot of hurdles in getting loans from big banks. None of the nationalized banks give loans to an MSME without collaterals,” said Bipin Patel, President, GCCI.
Gujarat has around 4 lakh MSME units, of which 70,000 are either closed or sick.
“There is already a Mudra Bank for very small business units. Similarly there should also be exclusive SME banks with branches all over the country. We have suggested this to the com mittee appointed by the government for MSME policy,” said Shailesh Patwari, Senior Vice President, GCCI.
SME banks providing financial assistance only to SME borrowers will also help the government monitor finances offered to MSMEs, GCCI believes.
The apex industry body in the state has urged the government to increase subsidy amounts for MSMEs opting for Initial Public Offer (IPO) from Rs 5 lakh to Rs 15 lakh.
“Many small companies are going for IPOs to raise money. The subsidy will be of great help as the cost of an IPO is around Rs 45 lakh,” Patwari said.
Other suggestions made by GCCI for the MSME sector include revision of the definition of an MSME, exemption from obtaining Environment Clearance (EC) and empowering state to grant EC, and simplification of tendering process for MSMEs.
With the stage set for nationwide rollout of Goods & Services Tax (GST), GCCI has pointed out 34 issues in the Model GST Law, which they believe can adversely impact the industry. These issues pertain to input tax credit, discounts, considering securities and electricity as goods among others. The trade body has submitted its observations to the state government. Based on the feedback and suggestions from various associations, necessary representation will be made by the state to Union finance minister and GST Council, GCCI said.
Source: Times of India
