MSMEs see some cheer in budget

Industry in Karnataka, especially the micro, small and medium enterprises (MSMEs), have much to cheer as the budget has come out with various initiatives aimed at improving the sector.

Explaining about the government’s move to bring about land reforms for MSMEs, Federation of Karnataka Chambers of Commerce and Industry (FKCCI) president M C Dinesh said, “Between 2014 and 2017, all the land given by the Karnataka Industrial Areas Development Board (KIADB) and Karnataka Small Scale Industries Development Corporation (KSSIDC) on lease to industrialists was for 99 years.

We’ve always debated that it should be leased for only 10 years, after which, it could be sold back to the industry. This was the rule prior to 2014 too, but currently remains abolished. Post the budget, we’ll go back to the old rule, which says that if land is taken from any of the two agencies, it will be in the industrialist’s name after the 10th year, who’ll receive ownership.”

For MSMEs, land is bread and butter, and even in the future, if the industrialist feels that his venture is not doing well, he may recover some investment by selling that land, which may also act as retirement benefit. This land will also improve the prospects of industrialists availing bank loans.

According to Karnataka Small Scale Industries Association (Kassia) president A Padmanabha, “MSMEs lacked the confidence earlier to put up new units since the existing rules were not conducive to them, but this land amendment will motivate the sector to expand and generate more employment.”

The budget also helps empower women entrepreneurs, since the government will provide loans of Rs 2 crore at 4% interest to aspiring businesswomen, against the current Rs 50-lakh loans at the same 4% rate. “This will not only motivate women to enter business, but also spouses of existing industrialists would take active interest in partnering and enhancing their family business,” Dinesh observed.

“The chief minister has considered the demand of small-scale industries and agreed to the appointment of separate director and commissioner to address sectoral issues and grievances. All these years, we were dependent on the present commissionerate which was busy with large-scale industries. Though they’re rendering services, the quantum is not enough to cater to SSIs,” Padmanabha said.

Meanwhile, Bangalore Chamber of Industry and Commerce (BCIC) president Thyagu Valliappa said, “We would have liked to see greater thrust to promote industrial development in the state. Better clarity on land allotment, uniform property tax system, abolition of labour licence and steps to improve the power and infrastructure sectors would have done a lot of good.”

However, he termed the budget as ‘progressive’ with equal focus on rural-urban development, which tries to address the regional imbalances. “Specifically, on the tax side, the budget is in the right direction — a step towards being one of the frontrunners in the implementation of GST,” Valliappa said. According to the economic survey of Karnataka 2016-17, “In 2015-16, 25,656 MSMEs were registered, with an investment of Rs 4,94,592 lakh, providing employment to 2,21,706 people.”

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