Budget evokes mixed response from industry
The Union Budget has evoked mixed response from the city’s industry. On the one side, it provided a boost to the Micro, Small, and Medium Enterprises (MSME) sector by significantly raising the thresholds for capital investment and turnover criteria for classification as Micro, Small and Medium Enterprises while on the other side these units are disappointed over non-withdrawal of Section 43B regarding their payments within specified time which is affecting them.
World MSME Forum has termed Budget as a damp squib and old wine in new bottle.
“Instead of enhancement in Income Tax limit, there was a dire need to make policies that could enhance income levels of citizens,” said Badish Jindal, president, World MSME Forum.
In India where 67% MSMEs have turnover below Rs 10 lakh and 99% of these have turnover below Rs 1 crore, the increase in definition of the MSME turnover from 250 crore to 500 crore shows the intention of the government to give benefits to corporates. These 1 per cent MSMEs having higher turnover will grab 95 per cent of the benefits of the MSMEs, Jindal said.
The decrease in import duty of bicycle from 35 per cent to 20 per cent and furniture from 25 per cent to 20 per cent will impact its manufacturers in India, he added.
Narinder Bhamra, president of the Fasteners Manufacturer Association of India said not much had been announced for MSMEs but the government could have taken steps towards formation of steel regulator, reduction in import duties on machinery to boost manufacturing, provisions of social security for tax payers, etc.
Sonu Nilibar, president of the Punjab Cloth Merchants Association, expressed disappointment over the Union Budget as no relief had been given on 45-day payment rule.
“The government ignored MSMEs’ plea to amend the 45-day payment rule, leaving small businesses struggling with cash flow issues,” he said.
Pankaj Sharma, president, ATIU, commenting upon the Budget announced today said: “Budget 2025 has nothing much to offer to the lower class and the middle class and it seems the government has only upcoming Bihar elections in mind while finalising the same.”
Meanwhile, the Federation of Industrial and Commercial Organisation (FICO) welcomed the revision of the income tax slab and exempted income up to 12 lakh for individuals. Also, it hailed the revision in the definition of MSMEs.
Gurmeet Singh Kular, president, FICO, said there should have been freight subsidy introduced for north Indian exporters who were far away from seaports so that they should also be able to maintain competitiveness with those who are located near the same.
There is an urgent need to prevent cartelisation of prices of raw material, especially in steels. The industry wanted a regulatory committee to be formed to curb abnormal fluctuations in raw material and do hand holding of the MSMEs but it has not been mentioned in the Budget, said industry representatives.
Except for the I-T limit which will boost the GDP there is not much for the industry and it seems the FM has tried to project it as a populist and a common man’s budget keeping in mind the upcoming state elections, said Anil Sachdeva from the ATIU.
“It’s a welcome step that the top 50 tourist destinations will be developed in collaboration with states and I hope that Ludhiana must be among the destinations as the new international airport is also coming up. The city will grow maximum once its tourist flow rises,” said Sanjay Goel, former director of Ludhiana Smart City Limited.