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Mumbai: Chandrakant Salunkhe, Founder and President of SME Chamber of India (SMECI) and Federation of Indian SME Associations (FISMEA) has in a letter addressed to Union Finance Minister Nirmala Sitharaman has urged the Union Finance Minister to raise Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) loans and reducing the Goods and Services Tax (GST) rates for Micro, Small and Medium Enterprises (MSMEs).
As part of the customary annual pre-budget exercise the Union Finance Ministry invites suggestions from various sectors of the economy. In response to the appeal, Salunkhe made the two recommendations to the Union Finance Minister.
The two demands of SMECI and FISMEA are –
Enhancement of CGTMSE Loans
Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) loans should be raised to Rs 5 Cr for micro, Rs 15 Cr for small & Rs 35 crore for medium businesses. The CGTMSE scheme provides credit guarantee to financial institutions to provide collateral-free loans to small businesses, and the Government of India has enhanced the loan disbursal limit from Rs 1 crore to Rs 2 crore.
The CGTMSE scheme grants loans up to Rs 2 crores, without third-party guarantee or collateral security. This is very useful in the current post-Covid business scenario wherein business operations have come to a standstill and SME business owners are unable to provide new security for loans. In event of the MSME unable to pay the loan, the scheme cover makes up for the loss. This enhancement in loan amount will be very timely & helpful.
Reduction in GST rate for MSMEs for professional services
Government should reduce the GST rate of 18% to 5% for various professional services used by SMEs.
This would help in leveraging professional services and assist in business growth.
Today the requirement of professional services by MSMEs is perhaps the highest, as they frequently need business and advisory services from professional accountants, consultants and domain experts outside their organisations. This is due to impact of technological disruptions, globalisation and an increasingly dynamic environment, coupled with business challenges due to pandemic these needs are becoming more urgent and necessary than ever.
The SME Chamber of India has been providing support to SME Entrepreneurs, manufacturers, exporters, senior executives from Corporates, Multinational Companies and Start-ups to establish & enhance business connectivity, identification of business & investment partners, potential suppliers, buyers, service providers, strategic business partners for distribution, franchise, sole selling agents, consultancy and professional services, facilitating introduction with purchase managers of SMEs, large corporates, MNCs, Government PSUs for supply and vendor development form last 27 years.
