Budget stimulus could bail out Covid-hit industry: FKCCI

Syed Shoaib | NT

Covid-19 has had a catastrophic impact on mankind, adversely affecting industries across the world, country and state. About 15-20 sectors across Karnataka have suffered crippling consequences of the on-going pandemic. Karnataka has over six lakh industries, more than half of which have been severely hit, according to resources.

While celebrating ‘Azadi Ka Amrut Mahotsav’ during 2021-22 and 2022-23, India commemorated its 75th year of Independence while calling for a total shift in policy formulation. Adequate planning and support to all economic sectors, thus hoping to contribute to the GDP, economy and employment generation. Prime Minister Narendra Modi set the ambitious target of making India a “$5 trillion economy” by the year 2025. Chief Minister Basavaraj Bommai echoed this aspiration when he said he would make Karnataka a “$1.5 trillion economy” by 2025.

In order to get there, Government of Karnataka must aim for the first place from the current fifth it stands at in the country, at achieving Ease of Doing Business by covering all departments under a single-window platform. It should upgrade existing online platforms, and enable online property registration and khata transfer, among others. The government must also take steps to improve the share of exports by conducting more awareness camps and motivating MSMEs to manufacture exportable goods. Documentation and compliance requirements for export must be simplified and made user-friendly.

The industry has also requested the government to reduce power tax from the present 9 per cent to 3 per cent for SMEs and introduce separate minimum demand charges for SME consumers.

It hopes the government will provide a state-specific procurement policy for products and services from SME enterprises located in Karnataka that provide special concessions like 15 per cent price preference, 4 per cent out of 20 per cent women enterprises, availability of free tender forms etc.

There is also the dire need to establish an online platform containing information regarding agencies working for the supply of raw materials like coal and steel, which must include functioning of the NSIC, KSSIDC, Karnataka State E-procurement cell, E-portal etc.

Federation of Karnataka Chambers of Commerce and Industry has placed a request for the provision of soft loans that are either interest-free or given with an interest subvention of 4 per cent per annum for a period of three years.

“This will help the industry survive the global downslide and protect employment it offers. However, the top priority should be the abolishment of trade licence for service and trade sectors.

“Boosting agricultural productivity and export value of agro-based products by announcing an exclusive ‘Agri-Tech Food Policy’ is also important:” according to President of the Federation Dr CA IS Prasad.

The wish list

• Request of interest subsidy or interest subvention at 4 per cent for all MSME affected sectors.
• Professional tax slab for employees to be increased from present Rs 15,000–30,000, which will benefi t employees by Rs 2,400 per annum.
• Providing adequate funds to execute PM Gatisakthi projects, seven engines for growth that will connect all districts by road, railways, ports, waterways, surface transportation and/ or mass transportation.
• Funds for infrastructure for ‘One district, one product’ thrust on the agro economy.
• Partial waiver of licence fees/ property tax / power charges for affected industries like hotel, tourism, cinema, tour operators, educational institutions and convention halls.
• Reduction of power tax from 9 per cent to 3 per cent.
• Establishment of townships in all industrial areas.
• Reduction of consent fees of Pollution Control Board.
• Abolition of trade licence.
• Industry status for hotel and cinema industries.
• Abolition of reduction of cess at APMC markets for a level playing field.