Stakeholders from industry and commerce sectors submitted a “wish list” to the Union Finance Minister Nirmala Sitharaman on Thursday and sought rationalisation of rates under GST, and support from the government for the automobile sector.
The stakeholders also blamed demonetisation and cashless transaction for the liquidity crisis and said that it has paralysed small and micro business units.
Ms. Sitharaman was in the city for a meeting with the tax officials on the implementation of the faceless tax assessment which is in the pipeline.
Sudhakar Shetty, Chairman, Federation of Karnataka Chambers of Commerce and Industry (FKCCI), said despite the macro-level initiatives taken by the government, there was little change at the micro level and urged the policy makers to make an impact assessment of the macro policies to attain the targeted goals.
He cited the examples of Make in India, Digital India, MUDRA etc., and said the ground reality was that there was lack of adequate, timely and cost-effective credit. Bureaucratic hurdles and delays and harassment for small errors were impacting the outcome of such policy initiatives.
Chronic shortage
With respect to the Micro, Small and Medium Enterprises (MSMEs), there was a chronic shortage of working capital and that has also hampered the work flow. Though the RBI did take a one-time stance by allowing the dealers to restructure certain credit facilities by the MSMEs and also relaxed the NPA classification norms, there was still a need for reviewing and overhauling the NPA classification and resolution process.
The FKCCI suggested that the Centre constitute a monitoring cell for each sector and sub-sector to ensure the ultimate objective of the policies are achieved. The FKCCI blamed demonetisation and cashless transaction for the liquidity crisis that is plaguing the MSMEs and said these units are finding it difficult to operate.
“Digital divide and illiteracy have made the transition to cashless economy very difficult to manage for many, while banks have become risk averse and are not ready to lend.”
Automobile sector
The Mysore Industries Association drew the Minister’s attention to the crisis in the automobile sector and said that the Automotive Component Manufacturers Association (ACMA) has expressed grave concern over the loss of nearly 1 million jobs if the contraction persists in the sector and sought an immediate fiscal stimulus to revive the growth/ employment.
It said the Central and State governments together must make all out efforts to revive festive season demand for commercial vehicles and passenger vehicles to accentuate the pace of growth for the ailing automobile sector.
For smooth transition
Mr. Suresh Kumar Jain, Secretary of the Association, and O.D. Satyendra, General Secretary, said the thrust on electric vehicles may be deferred in favour of Internal Combustion Engine (ICE) vehicles to ensure that the transition to electric vehicles is smooth, even if it takes place at a slow pace.
