<p>Bengaluru: Ahead of the Union Budget 2026, micro, small and medium enterprises (MSMEs) have stressed on the urgent need to ease the tax burden on small enterprises to support reinvestment, capital formation, and growth. A simplified, fair, and responsive GST framework, reduction of GST on labour charges to 5%, uniform GST interest rate of 6% on both refunds and dues, and creation of district-level GST Grievance Tribunals to ensure timely resolution of disputes, are other major demands of the MSME sector. </p>.<p>Raising the Section 44AB audit threshold to Rs 10 crore will enable small businesses to operate with reduced compliance pressure and lower operational costs, says SM Hussain, General Secretary, Karnataka Small Scale Industries Association (Kassia). </p>.<p>“These measures would significantly reduce compliance fatigue and correct many operational inefficiencies currently affecting MSMEs,” he says.</p>.<p>Reducing the tax rate for partnership firms from 30% to 25%, in line with competitive global practices will enable small firms to retain more of their earnings for business expansion, technology adoption, and job creation, adds Hussain. “These reforms are essential to improve cash flows and encourage entrepreneurship at a time when many MSMEs are still recovering from disrupted supply-chains and strained margins,” Hussain said in a pre-Budget memorandum submitted to Union Finance Minister Nirmala Sitharaman.</p>.<p>MSMEs remain central to India’s economic aspirations — including manufacturing expansion, employment generation, and the ‘Make in India’ vision — and therefore, require decisive policy support. Reviving India’s MSME sector requires bold tax rationalisation, GST simplification, affordable credit, and structural reforms.</p>.Centre to infuse Rs 5,000 crore equity in SIDBI to enhance MSME credit.<p>With these reforms, MSMEs can regain momentum, strengthen their competitiveness, and contribute more vigorously to India’s journey toward becoming a ‘Viksit Bharat’ by 2047, says Hussain.</p>.<p>The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has said an extremely aggressive approach is now required to counteract the ongoing economic uncertainties in the world that are adversely affecting India’s primary growth drivers. The expansion of the manufacturing sector has been pressured by increased input prices, supply interruptions, and labour shortages resulting from reverse migration. Businesses and entrepreneurs always anticipate reasonable, efficient, and expedient actions to boost the Indian economy and allow it to recommence at full vigour.</p>.<p>FKCCI has also recommended extending and expanding the Production-Linked Incentive (PLI) schemes to additional industries within the manufacturing sector, especially those covering micro and small units under the MSME category. “The present PLI beneficiaries are largely non-MSME units and extending these benefits keeping the micro and small sectors in focus will help in faster achievement of the $5-trillion economy goal,” says Uma Reddy, President of FKCCI.</p>.<p>The chamber has also demanded inclusion of Bengaluru as a metro for the purpose of HRA taxation computation.</p>
<p>Bengaluru: Ahead of the Union Budget 2026, micro, small and medium enterprises (MSMEs) have stressed on the urgent need to ease the tax burden on small enterprises to support reinvestment, capital formation, and growth. A simplified, fair, and responsive GST framework, reduction of GST on labour charges to 5%, uniform GST interest rate of 6% on both refunds and dues, and creation of district-level GST Grievance Tribunals to ensure timely resolution of disputes, are other major demands of the MSME sector. </p>.<p>Raising the Section 44AB audit threshold to Rs 10 crore will enable small businesses to operate with reduced compliance pressure and lower operational costs, says SM Hussain, General Secretary, Karnataka Small Scale Industries Association (Kassia). </p>.<p>“These measures would significantly reduce compliance fatigue and correct many operational inefficiencies currently affecting MSMEs,” he says.</p>.<p>Reducing the tax rate for partnership firms from 30% to 25%, in line with competitive global practices will enable small firms to retain more of their earnings for business expansion, technology adoption, and job creation, adds Hussain. “These reforms are essential to improve cash flows and encourage entrepreneurship at a time when many MSMEs are still recovering from disrupted supply-chains and strained margins,” Hussain said in a pre-Budget memorandum submitted to Union Finance Minister Nirmala Sitharaman.</p>.<p>MSMEs remain central to India’s economic aspirations — including manufacturing expansion, employment generation, and the ‘Make in India’ vision — and therefore, require decisive policy support. Reviving India’s MSME sector requires bold tax rationalisation, GST simplification, affordable credit, and structural reforms.</p>.Centre to infuse Rs 5,000 crore equity in SIDBI to enhance MSME credit.<p>With these reforms, MSMEs can regain momentum, strengthen their competitiveness, and contribute more vigorously to India’s journey toward becoming a ‘Viksit Bharat’ by 2047, says Hussain.</p>.<p>The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has said an extremely aggressive approach is now required to counteract the ongoing economic uncertainties in the world that are adversely affecting India’s primary growth drivers. The expansion of the manufacturing sector has been pressured by increased input prices, supply interruptions, and labour shortages resulting from reverse migration. Businesses and entrepreneurs always anticipate reasonable, efficient, and expedient actions to boost the Indian economy and allow it to recommence at full vigour.</p>.<p>FKCCI has also recommended extending and expanding the Production-Linked Incentive (PLI) schemes to additional industries within the manufacturing sector, especially those covering micro and small units under the MSME category. “The present PLI beneficiaries are largely non-MSME units and extending these benefits keeping the micro and small sectors in focus will help in faster achievement of the $5-trillion economy goal,” says Uma Reddy, President of FKCCI.</p>.<p>The chamber has also demanded inclusion of Bengaluru as a metro for the purpose of HRA taxation computation.</p>