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ASSOCHAM seeks further ease of doing business and credit flow for MSMEs

extending the scope of presumptive taxation to MSMEs and new age businesses like data centres, data hosting, cloud computing etc.

ASSOCHAM, in its pre-budget meeting with Finance Minister, Mrs Nirmala Sitharaman, has sought a slew of measures to encourage investment, including extending the scope of presumptive taxation to MSMEs and new age businesses like data centres, data hosting, cloud computing etc. offers a win-win situation both for taxpayers and the Government. According to Mr. Sanjay Nayar, President ASSOCHAM, this would help simplify compliances in the hands of such taxpayers by computing income on a predetermined basis, thereby reducing the apprehension of tax disputes and litigation. It also enables businesses to avoid complex audits/bookkeeping while knowing their tax liability in advance, allowing businesses better financial planning and management.
 
Mr Nayar also stressed the need to establish MSME universities to promote skill development and entrepreneurship training as well as to foster growth within the sector. He also highlighted the need to develop Integrated Infrastructure Townships for MSMEs (a revised version of the old Industrial Estate Development Program) across the country. These townships may include the following: (a) Common Testing & R&D facilitating Centres, (b) Financial institutions, (c) Common Service Providers, (d) housing for labour, (e) Schools, (f) hospitals, (g) training centers for labour, (h) export assistance centers, among others.
 
Mr. Nayar said despite the policy for collateral-free loans, MSMEs still face challenges in accessing credit. Banks often request personal property collateral and charge higher interest rates, hindering credit access.  He stated that it must be made mandatory for banks to disclose the number and amount of collateral-free loans granted periodically. He suggested that the upcoming Budget provide an additional allocation or net to enhance credit flow to the MSMEs, much like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) launched during COVID, which proved to be a lifeline driving the growth of MSMEs.

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