FISME highlights concerns for MSMEs post Budget 2016
Federation of Indian Micro and Small & Medium Enterprises (FISME), umbrella organization of SMEs in the country, based out of New Delhi has given its verdict on the recently announced Union budget 2016
Ahmad Shariq Khan| The Dollar Business Bureau
"Many concessions under excise tax and customs duty are for inputs used typically by large sector players like Machinery, electrical equipment, instrument used for semiconductor wafer fabrication/LCD fabrication units"
Federation of Indian Micro and Small & Medium Enterprises (FISME), umbrella organization of SMEs in the country, based out of New Delhi has given its verdict on the recently announced Union budget 2016.Many FISME members while acknowledging the good initiatives announced by Arun Jaitley this time have expressed their sector specific concerns as well.Many FISME members that The Dollar Business spoke to felt that that this time Modi's pet project i.e. ‘Make in India’ has been given a back seat in the Budget 2016, while many concessions under excise tax and customs duty are for inputs used typically by large sector players like Machinery, electrical equipment, instrument used for semiconductor wafer fabrication/LCD fabrication units.“While these may be welcome steps to promote electronics industry, they believe the engineering industry in the MSME was eagerly looking for some sops in this year’s budget. Make in India cannot happen just with the large companies. The SMEs play a vital role in this,” said Anil Aggarwal, Managing Director of PME Power Solutions India Ltd.Aggarwal said that more than the small companies, large firms are turning NPAs which affects the entire economy. He said the Finance Minister should also think about the MSME sector which has been ignored in the budget. Talking on dismal export outlook, he said, “High tariffs and minimum import price on steel items are making the engineering items highly uncompetitive in export market and also in deemed export of projects where Indian industries compete with global firms”.Another entrepreneur from Muzaffarnagar who is also a CEC member of FISME, Naveen Jain, (MD, Dayachand Engineering) said, “While in the Economic Survey, there was a mention about the safeguard duties on finished goods, whereas in the Budget there was no mention about it.”Jain believed that the absence of any such measures would badly impact the Make in India vision of the Government. “The Budget would just benefit the large players as the MSMEs have been completely ignored this time. More interestingly, in other basic metals like Aluminium, where prices are on a tailspin in global market, the Customs Duty has been raised to protect the domestic large manufacturers. For aluminium alloys and zinc alloys the enhancement in basic customs duty varies between 30 to 50%, from 7.5% to 10% in case of aluminium products. How this will encourage ‘Make in India’ for the large number of MSMEs in electrical and other aluminium based sector is anybody’s guess.”According to Jain, for encouraging productivity and quality in the MSME sector, the import duties on the CNC machines and other high performance machines should have been reduced, instead customs duties on some machines have been enhanced to protect the domestic machine manufacturers, mostly in the large sector.Echoing concerns of textile players in MSME sector, Animesh Saxena, Managing Director of Neetee Clothing, added, “The skewed view of the Government to the MSME sector is further demonstrated in textiles, where the excise duty on readymade garments increased, the tariff value enhanced and even the basic fibre used (PSF / PFY) proposed to be taxed at a higher rate. This is definitely going to impact the textile industries in the country and the above measures will affect the cost structure of the entire value chain of the readymade garments industry which is predominantly in the MSME sector”.