Assocham pushes for easier business and credit access for MSMEs

In its pre-budget meeting with Finance Minister Nirmala Sitharaman, the Associated Chambers of Commerce and Industry of India (Assocham) has proposed several measures aimed at encouraging investment and fostering growth, particularly in the micro, small, and medium enterprises (MSMEs) sector and emerging industries like data centers, cloud computing, and data hosting.

Sanjay Nayar, President of Assocham, advocated for expanding the scope of presumptive taxation to these sectors, suggesting that it would simplify compliance by allowing businesses to calculate their income on a predefined basis. This move could reduce the fear of tax disputes and litigation, simplify bookkeeping, and improve financial planning for businesses by clarifying tax liabilities upfront.

Nayar also emphasized the need to establish MSME universities to nurture entrepreneurship and skill development, which would aid in the long-term growth of this vital sector. In addition, he proposed the creation of Integrated Infrastructure Townships specifically for MSMEs. These townships would combine facilities like common R&D centers, financial institutions, housing for workers, training centers, and export assistance, which could be a game-changer for MSMEs across India.

Despite policies for collateral-free loans, Nayar pointed out that MSMEs still face significant barriers in accessing credit. He urged that banks be required to disclose periodically the number and value of collateral-free loans granted, highlighting the importance of transparent credit access.

To further support the MSME sector, Assocham requested additional funds in the upcoming budget to enhance credit flow, mirroring the success of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) introduced during the Covid-19 pandemic, which played a crucial role in helping MSMEs weather financial challenges and foster growth.