The Chamber in a report said that access to finance is a major roadblock being faced by the MSMEs impacting their competitiveness and growth
Amid the union budget 2023-24, the PHD Chamber of Commerce and Industry on Wednesday suggested that the focus of the government should therefore be on hassle-free disbursements of loans at affordable rates of interest for the businesses for micro, small and medium enterprises (MSMEs).
The Chamber in a report said that access to finance is a major roadblock being faced by the MSMEs impacting their competitiveness and growth.
“The current banking norms result in high primary security and collateral security demanded by banks for the MSMEs which hampers their growth prospects,” it added.
It also said that the vast majority of MSMEs are either sole proprietorships or partnerships. Hence, taxes should come down on these types of businesses, going forward.
For such businesses, PHD Chamber suggested that the maximum tax slab be brought down to 25 per cent this year.
“At this juncture, continuous support to MSMEs and Startups is required to help them rejuvenate their growth after the daunting impact of the pandemic Covid-19,” it stated.
The national body also suggested that the value chains of MSMEs should be further enhanced.
Thus, making them more structurally competent to add to their efficiency, share in the manufacturing sector, employment generation and the country’s overall export growth momentum, it stated.
Meanwhile, India’s MSMEs sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the years, with contribution of around 30 per cent in GDP, more than 49 per cent in exports and 11 crore in employment.