Union Budget: MSME sector hopes govt will cut red tape to boost growth

Ludhiana, July 22

The Chamber of Industrial & Commercial Undertaking (CICU), Ludhiana, today issued a strong call for immediate action to address pressing challenges facing the Micro, Small and Medium Enterprises (MSME) sector, particularly in the state. The chamber highlighted several critical issues, hindering the growth and competitiveness of MSMEs, urging the government to implement comprehensive solutions.

CICU president Upkar Singh Ahuja expressed deep concern over the low utilisation of existing MSME schemes, despite the Ministry of MSME allocating a substantial budget of Rs 22,136 crore for 6.3 million MSMEs. “The current system is riddled with bureaucratic hurdles, making it difficult for MSMEs to access these vital resources,” Ahuja stated. “The schemes need to be simplified, with streamlined documentation and procedures. Furthermore, the budget allocated to the MSMEs must be tripled to effectively support the sector’s growth.”

List of demands

• Budget allocated to MSMEs must be tripled.
• Proposed freight corridor from Kolkata to Ludhiana must be operationalised.
• Petrol/diesel under the GST will allow MSMEs to claim input tax credit.

CICU outlined a series of critical issues impacting the competitiveness of MSMEs in Punjab and proposed concrete solutions, expecting tomorrow’s budget would bring much needed respite. The proposed freight corridor from Kolkata to Ludhiana must be operationalised to ensure cargo reaches the port within 36 hours, significantly reducing the current 6-8 day transit time. This will significantly reduce transportation costs and improve supply chain efficiency, said the CICU members.

“Including petrol and diesel under the Goods and Services Tax (GST) regime will allow MSMEs to claim input tax credit, reducing transportation costs, particularly for businesses located far from seaports,” said Ahuja.

Besides, the industry feels that income tax slab for businesses should be reduced.

The current rates, which include a surcharge, are significantly higher than those in other countries, making Indian businesses less competitive, said the CICU president.