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FOR PIA NEWS MAGAZINE

KUDOS TO CHIEF MINISTER

State Budget is “Perfect” for MSMEs: PIA President

“Hon’ble Chief Minister Sri Siddaramaiah has delivered a perfect Budget for 2017-18 for Micro and Small Enterprises, declared Sri R. Krishnamurthy, President, PIA.

This Budget will be remembered for a very long time by Micro & Small Scale Enterprises, especially in Peenya Industrial Area, he said.

“For us in Peenya Industries Association (PIA), it is a matter of great delight and immense satisfaction that some of the major grievances represented by us in our Pre-Budget Memorandum presented to the Hon’ble Chief Minister have been resolved,” Sri Krishnamurthy said.

“For many years we had been fighting for making available industrial land from KSSIDC/ KIADB to micro and small entrepreneurs on 10 years lease cum sale as was the case earlier, and which had been increased to 99 years lease. The Budget has restored the 10 years lease cum sale policy and this will realise the dreams of thousands of small entrepreneurs. Land is the only asset that remains in the hands of a micro entrepreneur and it is his bread and butter, outside the vagaries of running an industry. So once the ownership of land passes on to the entrepreneur after 10 years, it will be akin to a retirement benefit and boost his confidence in running the industry or give wing to his expansion plans,” he explained.

The PIA President also pointed out that the concession of 25% offered to entrepreneurs belonging to category1, 2A and 2B for allotment of industrial sheds/plots by KSSIDC/ KIADB will give a big boost to small industry growth.

“Another great news that has cheered all of us is the announcement to have an exclusive Directorate with an independent Commissioner at the helm, for MSMEs. We had been successively raising this demand for many years and finally, our demand has been met in this Budget. This will ensure that policy making for MSMEs will be determined solely on the unique needs and concerns and the circumstances governing the small industry,” he observed.

“The enhancement of limit for soft loans to women entrepreneurs at 4% from Rs 50 lac to Rs 2 crore will encourage more and more women to take up self-employment and thus give a tremendous fillip to job creation,” he added, and profusely thanked the Hon’ble Chief Minister Sri Siddaramaiah and his entire Team for meeting the major aspirations of all micro and small entrepreneurs.

BUDGET HIGHLIGHTS

An exclusive and independent Directorate for MSMEs

Restoring the 10 years lease cum sale policy from 99 years policy to micro and small enterprise for allotment of industrial land up to 2 acres by KSSIDC/ KIADB

Enhancing the loan quantum from Rs 50 lac to Rs 2 crore at 4% interest for women entrepreneurs

Concession of 25% offered to entrepreneurs belonging to category1, 2A and 2B for allotment of industrial sheds/plots by KSSIDC/ KIADB

New policies will be formulated for encouraging new generation industries in the next two decades such as 3D printing, Robotics, Nano technology, IOT, Big Data, artificial intelligence, machine learning, Stem Cell research, DNA medicine, etc.

Develop a Machine Tool Park in an area of 542 acres in Vasanthanarasapura Industrial Estate, Tumakuru jointly with GOI

Institution of an Award for Best functioning Industry

Organize a National-level Marketing Meet to encourage MSMEs

Encourage SC/ST Entrepreneurs by offering them Rs.2/- per unit power subsidy for 5 years. Govt. will bear processing, legal and loan disbursement charges, in addition to distribution of C&D Sheds at concessional rates by KSSIDC, and waiver of Rs 46 crores of margin money loans obtained from 2010-11 to 31-3-2017.

To give strong emphasis and encourage export of toys, mobile phone manufacturing, tablets, electrical equipments
Set up a Precision Metrology Lab in association with CMTI premises to encourage engineering industry

Allocation of Rs 400 crore to KIADB for acquisition of land to commission Chennai-Bangalore-Chitradurga industrial corridor.

Total allocation for Commerce & Industries Department Rs 2250 crores

To make Bengaluru the Electric Vehicle Capital of the country

Set up Business Incubators to encourage women entrepreneurship

To pursue establishing a Centre of Excellence at Dobbaspet (Grant of Rs 5 crore to KASSIA)

A Vision Group to be constituted to encourage pharmaceuticals and medical devices sector

A package for Weavers with an allocation of Rs 150 crore

POINTS ON STATE BUDGET 2017-18:

The Karnataka Budget 2017-18 presented by Hon’ble Chief Minister Sri Siddaramaiah will be remembered for a very long time by Micro & Small Scale Enterprises, especially in Peenya Industrial Area.

For us in Peenya Industries Association (PIA), it is a matter of great delight and immense satisfaction that some of the major grievances represented by us in our Pre-Budget Memorandum presented to the Hon’ble Chief Minister have been resolved.
For many years we had been fighting for making available industrial land from KSSIDC/ KIADB to micro and small entrepreneurs on 10 years lease cum sale as was the case earlier, and which had been increased to 99 years lease. The Budget has restored the 10 years lease cum sale policy and this will realise the dreams of thousands of small entrepreneurs. Land is the only asset that remains in the hands of a micro entrepreneur and it is his bread and butter, outside the vagaries of running an industry. So once the ownership of land passes on to the entrepreneur after 10 years, it will be akin to a retirement benefit and boost his confidence in running the industry or give wing to his expansion plans.

Concession of 25% offered to entrepreneurs belonging to category1, 2A and 2B for allotment of industrial sheds/plots by KSSIDC/ KIADB will also give a big boost to small industry growth.

Another great news that has cheered all of us is the announcement to have an exclusive Directorate with an independent Commissioner at the helm, for MSMEs. We had been successively raising this demand for many years and finally, our demand has been met in this Budget. This will ensure that policy making for MSMEs will be determined solely on the unique needs and concerns and the circumstances governing the small industry.

The enhancement of limit for soft loans to women entrepreneurs at 4% from Rs 50 lac to Rs 2 crore will encourage more and more women to take up self-employment and thus give a tremendous fillip to job creation.

POINTS FOR UNION BUDGET 2017-18

From the micro and small scale industries point of view, the Union Budget did not touch too much on tax measures for the industry since we would be moving towards a GST regime a few months later, i.e. by July 1. So as far as industry & trade is concerned, we will have to wait for the rollout of the GST regime.

PIA welcomes the reduction in corporate tax rate to 25% for MSMEs with annual turnover less than Rs 50 crore.
The doubling of the allocation under Pradhan Mantri Mudra Yojana to Rs 2.44 trillion will definitely spur entrepreneurial growth, while the newly restructured central Trade Infrastructure for Export Scheme (TIES) will help create modern infrastructure like last mile connectivity to ports, testing labs and certification centres, and the special scheme for creating employment in leather/footwear sector addressed the lacuna of jobless growth.

PIA also Welcome other initiatives like the focus on domestic manufacturing of mobile devices and components to strengthen ‘Make in India’ and make India a global hub for electronics manufacture.

We also look forward to the proposal to simplify, rationalize and amalgamate existing labor laws in 4 codes, viz. Wages, Industrial Relations, social security & welfare, safety & working conditions, though one will have to wait for the fine print for more clarity on this all important issue for MSMEs.

The Budget has kept the Central Excise and Service Tax rates unchanged. Responding to industry bodies’ request on CENVAT, the Budget has extended the time limit to transfer the cenvat credit consequent to merger from 3 months to 6 months on sufficient cause being shown.

Broadly speaking, the Union Budget is pro-growth and pro reforms. The Finance Minister has displayed maturity by adopting a prudent approach rather than going for a populist budget.

However it is unfortunate that there was no special allocation or focus on building the infrastructure requirement of Bengaluru, which had recently been recognized as the most dynamic city in the world. The Government should have addressed this appropriately since Bengaluru is now the cynosure of the global community. The Budget also does not have any major initiatives to revive the ailing MSME sector.

For Start-ups, the budget has extended the time period for availing tax benefit for three years in the first seven years of existence of a start-up company.

Earlier the deduction was available for three years in first five years. While this is to be welcomed, it needs to be clarified whether start-ups also include the manufacturing sector.[/vc_column_text][/vc_column][/vc_row]