Parul
In the pre-budget meeting with Finance Minister Nirmala Sitharaman in New Delhi, Apex engineering exports promotion body EEPC India has proposed to introduce a 25 per cent income tax slab for MSME manufacturing units that are partnerships, LLPs, or sole proprietorships with the condition that the extra 10 per cent saved must be reinvested in the business.
This will give MSMEs extra cushion of 10 per cent for expansion/working capital improvement and improve their liquidity. This will also generate employment due to expansion undertaken by MSME units. Increased funding under the Market Access Initiative (MAI) Scheme has also been proposed to facilitate trade promotional activities.
Enhancing the total MAI fund allocation to Rs 1,200 crores would support MSMEs in participating in international trade events and connect with their global counterparts.
“Allocating specific funds for capacity-building programs targeting prospective exporters in interior districts and rural areas would enable them to enter international markets,” said EEPC India Chairman Pankaj Chadha.
In order to support MSMEs in transitioning to sustainable energy practices, EEPC India has also proposed to introduce a policy allowing 100 per cent depreciation on investments in solar power generation by MSMEs, similar to previous benefits provided for wind power generation. This would incentivise MSMEs to reduce their carbon footprint and lower energy costs.
Among other proposals, EEPC India has recommended to establish a transparent and effective mechanism to ensure MSMEs access steel at affordable price, balancing the interests of both producers and users.
“The introduction of a safeguard duty on certain steel imports may increase the landed cost of steel, leading to higher domestic prices. For MSMEs, steel constitutes 60 per cent of their production costs, making them vulnerable to global competition and potential job losses. While steel producers have agreed to supply steel at export parity prices, MSMEs often purchase from intermediaries like agents or distributors,” Chadha said.
EEPC India has also recommended to increase the cap under Interest Equalization Scheme (IES) to Rs 10 crores to provide more substantial financial support to MSME exporters, aligning with the previous limits and the growing needs of the exporting community.
