The problems of micro, small and medium enterprises (MSMEs) remain unsolved despite the tax exemption measures announced by the government, said Basavaraj S Javali, President of Karnataka Small Scale Industries Association (Kassia).
"The 18% tax on the working capital of the firms that convert raw goods to final goods adds up to their tax burden as they are paid only after 90 to 120 days. We hope that either the government levies 5% tax or nothing on the value additions or labour work," he said.
He further said the bill to redefine the definition of MSMEs has been introduced in the Lok Sabha but it fails to properly define an MSME as the new definition now focusses on the turnover of the industry rather than the manufacturing methods as there are industries selling rebranded goods while the manufacturing industries get sidelined.
"Assuming that the bill gets passed, we hope that the government will ensure that manufacturers are protected from such exploitation," he said.
Kassia is planning to request the government to allocate certain funds to the MPs so that they provide infrastructure for only the small industries, Javali said stressing on the need for proper infrastructure facilities for industries to function effectively.
Another issue that he mentioned was that the MSMEs shouldn't get burdened under the weight of NPAs and that the government should assist them in either avoiding bad loans or rehabilitating in case if the industry is affected by it.
"We want the government to take the example of Amazon and Flipkart and create a national alternative to such e-tailers," he added.
Kassia is organising South India MSME Summit-2019 on January 17, which will be attended by the industry representatives from Karnataka, Andhra Pradesh, Telangana and Tamil Nadu.