Micro, Small, and Medium Enterprise (MSME) stakeholders urged the government to implement GST reductions, technology upgrades, and extend Production-Linked Incentive (PLI) benefits to various sectors during a pre-Budget meeting with Finance Minister Nirmala Sitharaman on Saturday. The interaction aimed to gather inputs for the Union Budget 2025-26, scheduled for presentation on February 1.
Key Suggestions from MSME Representatives
Technology and GST Reforms
Stakeholders highlighted the need for addressing technology gaps and skill development, with calls for specific measures such as linking the GeM (Government e-Marketplace) portal to Udyam registration to expand MSMEs' market reach.
The All India Plastics Manufacturers' Association advocated for a Technology Upgrade Fund akin to that for the textiles sector. Additionally, they requested a GST exemption for recycling machines and a reduction in GST on raw materials.
The Federation of Andhra Pradesh Small and Medium Industries Association emphasized the importance of Industry 4.0 technology adoption, GST exemptions, and strict adherence by banks to RBI revival guidelines for struggling units.
PLI Scheme Expansion
Multiple representatives urged the government to include their sectors in the PLI scheme:
- Plastics sector: A PLI scheme to support scaling up domestic production.
- Power electronics: PLI for products used across industrial and household applications to encourage domestic manufacturing and reduce import dependency.
Strengthening the MSME Ecosystem
Participants reiterated that MSMEs are the backbone of the Indian economy. They called for:
- Reviving and updating the MSMED Act.
- Enhanced focus on skill development and addressing infrastructure bottlenecks.
- GST reductions to ease the financial burden on small businesses.
Voices from the Industry
The All India General Secretary of Laghu Udyog Bharati expressed optimism about the deliberations, stating that if adopted, the proposals could significantly boost MSME growth.
The National Convenor of All India Manufacturers' Association stressed the critical role of PLI schemes in scaling domestic manufacturers, noting that power electronics products form a major component of industrial and household goods.
The All India Plastics Manufacturers’ Association emphasized environmental and operational improvements, pushing for a GST exemption on recycling machinery to promote sustainable practices.
Conclusion
With MSMEs contributing significantly to employment and GDP, their demands underscore the sector’s pivotal role in driving India’s economic growth. The upcoming Budget could play a crucial role in addressing these concerns, fostering innovation, and ensuring a level playing field for MSMEs in global and domestic markets.
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