The pandemic-hit industry has high expectations from the Union budget, which finance minister Nirmala Sitharaman will present on Tuesday.
Micro, small and medium enterprises (MSMEs) have been among the worst-affected sectors as a significant increase in the price of raw material has affected the cost of manufactured goods.
Manufacturers say the price of diesel is galloping, while the cost of energy consumption has gone up by around 15%, effecting the cost of manufacturing. “The government must look at the state and central taxes levied on fuel to alleviate the stress,” say manufacturers.
“MSMEs are still feeling the ripple effect of the coronavirus pandemic in these tough times. We hope that the automobile components manufacturing sector is promoted, and taxes are reduced,” says Pankaj Sharma, owner, Osha Tools, Focal Point, and general secretary, Chamber of Commercial and Industrial Undertakings(CICU).
Sharma, who manufacturers auto part components for original equipment manufacturers (OEMs) and has been in the business for two decades says the government should reduce GST rate on used cars from 18% to 5% as India is home to the world’s fifth largest used-car industry.
“Reduction in used cars’ GST will help the industry shift from the unorganised to the organised sector,” he said, demanding that the GST on two-wheelers be reduced from 28% to 18%. “This will help bring industry and auto-retail trade back on the path of growth. The two-wheeler is no longer a luxury, but a necessity,” he said.
{{/usCountry}}“Reduction in used cars’ GST will help the industry shift from the unorganised to the organised sector,” he said, demanding that the GST on two-wheelers be reduced from 28% to 18%. “This will help bring industry and auto-retail trade back on the path of growth. The two-wheeler is no longer a luxury, but a necessity,” he said.
{{/usCountry}}“To promote electric vehicles, the government should provide incentives and tax rebates for the industry, especially for start-ups, which play a significant role in attracting investment, especially in second-tier cities. Businesses have suffered badly during Covid,so to lend support and boost them, government should ease the norms for raising funds, especially foreign funds,” he said.
Federation of Industrial and Commercial Organisation (FICO) chairperson Gurmeet Kumar said the price of steel had almost doubled over the past year or so, making it unviable for MSMEs to operate. “Prices in export orders are not increasing, causing major losses to the industry, especially the MSMEs, which are on the verge of closure. The government should ban export of steel if there is a shortage. The government should also rationalise the prices of steel and other raw material as the sudden spike has made it impossible for MSMEs to meet confirmed orders, “ he said, adding that the credit link capital subsidy scheme should be made permanent.
CII, Punjab, vice-chairperson, Amit Thapa said they wish for no new taxes on textiles, extension of PLI (Production linked investment scheme) to more products within textiles, export benefit and higher budget allocation in the budget.