[vc_row][vc_column][vc_column_text]Sri R. Krishnamurthy, President, Sri C. Krishnamurthy, and Sri Mayank Kaushik, MCMs took part in the Pre-Budget Meeting with various Trade Bodies convened by Hon’ble Chief Minister Sri Siddaramaiah at Vidhana Soudha on Feb 17.
PIA presented a Pre-Budget Memorandum to the Hon’ ble Chief Minister incorporating the main concerns of entrepreneurs in Peenya Industrial Area. 
“*Peenya Industrial Area, South-East Asia’s largest industrial extension contributes to the State and Central Government exchequer more than Rs 2,600 Crores as Central Excise and Custom Duty, Rs 250 Crores as Corporate Tax and Rs.1,400 Crores as Commercial Tax. We therefore believe that the State Government should heed to the concerns and aspirations of the entrepreneurs in Peenya. In our Memorandum, we have highlighted some of the most important grievances of Micro and Small Scale Entrepreneurs in particular, such as Speedy implementation of the much delayed Peenya Industrial Township which has been promised in the New Industrial Policy; Announce a budgetary allocation of Rs 500 crore towards one-time up-gradation of basic infrastructure in Peenya Industrial Complex; Sanction an annual grant for Peenya Industries Association (PIA) to enable it to continue to conduct various developmental activities like Vendor Development Programmes, and promote Government Schemes; etc; reinstate the 30% purchase preference and 15% price preference for MSMEs in PSUs; etc,” said Sri R. Krishnamurthy, President, PIA.
A gist of the suggestions and recommendations mentioned in PIA’s Pre-Budget Memorandum is given below for the ready reference of Members:
Peenya Industrial Township
This has been one of the most important long pending demands by PIA which has not been realized for several years. Peenya Industrial Township has been promised in the New Industrial Policy and we request for the speedy implementation of the same.
While bestowing the status of an Industrial Township on Peenya, the following may also be incorporated:
* Setting up of SPZ (Special Planning Zone)
* Setting up of SEZ (Special Economic Zone)
* Industrial Park
* Setting up of more Multi-specialty Hospitals in the vicinity for the welfare of the industrial workers
One Time Up-gradation of Infrastructure in Peenya Industrial Complex:
Roads in Peenya are very bad in nature, potholes-ridden, poorly maintained, accident-prone and therefore the traffic is chaotic most of the time.
Drainage System is also pathetic resulting in further damage to the Roads due to overflow of the Storm Water on the Roads.
Street Lights are hardly seen and about 3.00 lakh Women working in the MSMEs and Garment Industries in and around Peenya are finding it very difficult in commuting to their factory and returning home from work.
In view of the above, immediate action is required to upgrade infrastructure in Peenya Industrial Complex by allocating in the State Budget, Rs 500 crore for the same.
Annual Grant for Peenya Industries Association:
Peenya Industries Association (PIA) is promoting various developmental activities like Vendor Development Programmes; setting up Management Institute for the benefit of entrepreneurs and their employees; a Technical Library and conducting various knowledge disseminating Seminars and Workshops. This is apart from a Working Women’s Hostel, Crèche for the children of physically challenged, Common Tool Room for the benefit of MSME Community and their workers.
In view of the yeoman service rendered by Peenya Industries Association (PIA), as many of these initiatives are supplementing and supporting the activities of the State, the Government may kindly consider sanctioning an annual grant to PIA to enable it to conduct the development activities mentioned above and partner with the Government to promote its various Schemes and initiatives.
Public Procurement Policy:
As per the Industrial Policy the MSMEs are to be given both Purchase Preference of 30% and 15% Price Preference in order to be competitive when compared with Large & Medium Enterprises. Some of the corporations like KSRTC adopted the policy where the MSMEs were asked to match L-1 rates of Large Industries, whereas some Corporations paid 15% higher price to the MSME suppliers.
Because of ambiguity in the procedure adopted by each Department in the 15% price preference, this policy for the Government corporations and public undertakings has been withdrawn and at present no MSME can supply materials to any of the Government undertakings.
We therefore request the Government to reinstate the 30% purchase preference and 15% price preference and prescribe a procedure as in the case of KSRTC, where if the MSME supplier is ready to match L-1 price of large Manufacturer, he should be given preference.
Also in the case of Tamil Nadu, the out of State Suppliers should be asked to bill from Karnataka, so that the VAT disparity could be resolved. This would help large number of small and micro industries of the state.
The Government has to formulate a procurement policy which will be applicable to all Departments, autonomous bodies and local bodies’ up to Panchayat level. A Government order may kindly be issued in this regard.
Every Department is having a Purchase Committee to implement its purchase programme. It is suggested that the President of PIA should be inducted as a Member in each departmental Purchase Committee to serve as a spokesman of the MSMEs in order to highlight the procurement policy content at the decision making stage in ensuring the interests of MSMEs.
The Procurement Policy should explicitly recognize the role of the decentralized MSMEs Sector which is contributing significantly to the share of states manufacture, employment, revenue and exports. A fair share of minimum 30% of the Public Procurement should be reserved for the MSMEs in the State.
In addition, the following ingredients of the Central Policy of Stores Purchase should be incorporated in the policy.
* The Government of India under the Government Purchase and Price Preference Policy for MSMEs provides the following facilities / benefits to the MSMEs registered with NSIC.
* Issue of tender sets free of cost
* Exemption from payment of Earnest Money
* Waiver of Security Deposit up to the Monetary Limit for which the unit is registered.
* Price Preference up to 15% over the lowest quotation of large-scale unit; and
* In addition to the above, 358 items to be reserved for exclusive purchase from MSME sector.
The Government of India in its communication No.F.No.25 (2)2011-MA, dated 14th October, 2011 has further emphasized about the implementation of the scheme at the State level.
The Basic price excluding the state tax should be considered while finalizing tenders since the tax in Karnataka is high compared to 2% CST.
Pre-Eligibility Conditions:
It has become common for the purchasing organizations to stipulate arbitrary pre-eligibility conditions beyond the scope of a typical small industry. There are instances of prescribing high annual turnover in crores of rupees or previous supply experience for certain number of years etc., which makes it impossible for qualified new entrepreneurs to participate in Government supply.
There should be norms for prescribing pre-eligibility conditions in a rational manner.
KSFC:
der the scheme 772 units were assisted from the year 2001-02. The Corporation has been lodging claims each year against which part amounts have been disbursed by C & I department and subsidy have also been passed on to respective beneficiaries.
As on date a total claim towards interest subsidy of Rs.610.80 lakhs is pending in respect of 669 units eligible for interest subsidy reimbursement as per the Scheme. A request was made vide letter No. KSFC/DGM( C)/HD 108/ 2011-12 dated 03rd February, 2012 to make a Budgetary provision for providing subsidy. But, no budgetary provision has been made.
Most of the assisted units of KSFC with good track record were expecting reimbursement of subsidy. The inordinate delay in releasing the funds resulted in some of the borrowers closing their accounts and migrating to the Banks. The issue relating to pending subsidy is coming up very frequently in the discussions with the Industries Association like Peenya Industries Association, KASSIA, etc.
Besides, the issue has also been raised by the aggrieved entrepreneurs in the Adalat Meetings conducted by the Industries Department.
Given this background, PIA requests for a budgetary allocation of Rs.10 crores towards the release of entire TDMF Interest Subsidy backlog in one stroke.
KSSIDC:
Promotion of ready-to-use Infrastructure with fully constructed Sheds: KSSIDC should consider establishing fully constructed sheds with all supporting infrastructure for MSMEs as they cannot afford to pay advance at every stage for development of Industrial Estates and further, almost 93% of small entrepreneurs operate in private industrial areas due to scarcity of industrial land.
Peenya Industrial Complex has grown to this extent only because KSSIDC in the first place constructed sheds and allotted the same to the entrepreneurs on lease cum sale basis.
Currently we see very few qualified first generation Entrepreneurs entering the MSMEs sector. Unless and until the state Government provides fully developed industrial Infrastructure a Micro will remain a Micro and Small will remain small even after 2 to 3 decades of existence.
It is also very important that the GOK access grants from the Central Government for subsiding the cost of infrastructure. Subsidizing the cost of infrastructure is the only way for promotion and development of MSMEs since if the cost of the infrastructure goes up it becomes unviable for an entrepreneur to run the business and to service the infrastructure cost.
Representation of PIA in State Development Agencies and Bodies:
Peenya Industries Association (PIA) represents 8,500 MSMEs in Karnataka and has over 35 years of experience in dealing with issues relating to Micro and Small Industries. It is in fitness of things to provide representation to PIA in the Boards of State bodies like KSSIDC, KIADB, KSFC, KSIIDC, LIDKAR, KSRTC & BESCOM.
KSPCB Exemption of Consent:
As is being practiced in Andhra Pradesh, the Green Category Industries should be free from getting consents from KSPCB.
Grant for GST Migration Programmes: PIA has held 5 Awarness Programmes on GST and wish to conduct another 5 programmes on GST. In this regard, it is requested that the State consider sanctioning a Grant of Rs 10 lac to support our initiative.
E-payment:
The compulsion to make tax payment only to the ten nominated banks is hampering the MSME entrepreneurs. Further, shifting of bank accounts to a nominated bank is an avoidable burden on them. Therefore all the nationalized banks should be included in the list for accepting tax payments.
Skill Development Stipend:
The Stipend to the un-skilled workers to be trained by Small Scale Industries right now is very meagre. We propose the stipend be raised from existing Rs. 1500/- per month to Rs. 3,500/- per month and for CNC operators this stipend from the Government should be around Rs. 5,000/- under the Kaushalya Scheme of Government of Karnataka.
KPTCL :
Establishment of Master Unit Sub-Station (MUSS): There is an urgent need for establishment of Master Unit Sub Station. While KPTCL has allotted one more MUSS station for Peenya, it is unable to set up the same as the place is not made available. Approximately 40 Mtrs X 80 Mtr land is required for the same. We request for the speedy installation of MUSS.[/vc_column_text][/vc_column][/vc_row]
