The COVID-19 pandemic has thrown the SMEs into a deep crisis in the State. They badly need support by way of payroll, electricity and interest payment subsidies as well as suitable reduction of GST rates and compliance requirements. No substantive reliefs have been offered either by the Centre or the State, and the minor concessions offered do not trickle down.
As a result, over 30% of SMEs, the backbone of the economy, will fold up and throw lakhs out of job, a statement from KASSIA on Saturday warned.
KASSIA has flagged issues of labour, energy, GST and finance that it believes are matters of worry. It, therefore, asked the Chief Minister to convene a meeting of senior officials concerned, under his chairmanship, to discuss these and other relevant issues to find solutions to some of the serious problems facing the sector,
Labour issues
Important issues dogging the SMEs revolve around labour. KASSIA has sought waiver of ESI & PF contribution for six months. It has also asked for permission to increase the working hours to 10 hours. KASSIA has recommended that employees be paid 70% of salary through ESIC or Welfare fund. It wants no wage increase/revision for 3 years and suspension of bonuses for 3 years.
Energy issues
On the energy front, KASSIA has sought the waiver of fixed charges for 1 year, from March, for all categories of industry, while saying that billing should be on actual consumption. On the tariff front, it has sought a reduction to tide over the crisis.
Property taxes
KASSIA has sought the waiver of property tax on industrial properties for 2020-21, both in BBMP and rural areas.
GST
GST has been among the most vexing points for SMEs. KASSIA has sought the relaxation of payment of GST by SMEs for March, April and May without any interest, penalty and late fees. “SMEs should be allowed input tax credit on all purchases,” said the statement.
Finance
The issues relating to finance include the extension of time for clearing FIRC bills, waiver/reduction of processing/documentation charges for term loans and extension of the waiver of additional penalty on the import of goods and a deferral of term loans, interest, including on working capital, easing the burden of cumulative payment.
While the pandemic is killing people, it is also having a less highlighted issue of small-scale units facing an existential crisis.