New Delhi, Nov 10 (PTI) A delegation from industry body PHDCCI met Finance Minister Nirmala Sitharaman on Tuesday to submit pre-Budget recommendations, pitching reforms to deepen capital markets and expand MSME financing, including the removal of the 12.5 per cent long-term capital gains (LTCG) tax on equity investments.
In its pre-Budget suggestions, the industry body also sought lowering of the short-term capital gains (STCG) tax to 10 per cent from 20 per cent.
Besides, it suggested a revision of MSME NPA Classification Norms, by extending the overdue period for NPA classification from 90 to 180 days to accommodate longer working capital cycles and delayed realisation of receivables.
"We acknowledge the government's initiatives to strengthen the industrial and MSME ecosystem, particularly through improved access to finance, credit guarantees, equity funding and resolution of delayed payments," said PHDCCI President Anil Gupta.
MSMEs are the backbone of India’s economy. They contribute about 31 per cent to India’s GDP, account for 48.58 per cent of total exports, and generate around 35.4 per cent of manufacturing output.
The sector encompasses more than 7.47 crore enterprises across manufacturing, services, and trade activities and provides livelihoods to approximately 32.8 crore people.
"To strengthen India’s MSME ecosystem further, PHDCCI recommends the change in classification of non-performing assets (NPA), enhancement of PM MUDRA Loan Limits, strengthening CGTMSE implementation, and Direct Equity Support," Gupta added.
PHDCCI also suggested enhancement of PM MUDRA Loan Limits. The scheme was launched on April 8, 2015, with the objective of providing access to institutional collateral-free credit to micro enterprises.
It sought increasing loan ceilings to Rs 1 lakh under Shishu, Rs 10 lakh under Kishore and Rs 20 lakh under Tarun/Tarun Plus categories to reflect rising project costs.
The industry body suggested strengthening CGTMSE implementation by ensuring effective collateral-free lending through stricter compliance by banks and establishment of a centralised portal for tracking applications and monitoring rejection reasons.
"We believe that ease of access to credit, equity support, rationalisation of taxation and strong implementation of government schemes will foster faster growth of Indian industry as a global manufacturing hub," said Ranjeet Mehta, Secretary General & CEO, PHDCCI.
(This story has not been edited by THE WEEK and is auto-generated from PTI)