Increased Allocation for MSME Initiatives
Micro, Small, and Medium Enterprises (MSMEs) in Kerala have urged the State Finance Department to significantly boost budgetary allocations in the upcoming 2025-26 Budget. The demand comes in response to the needs of various government initiatives, including the Year of Enterprises Campaign, private industrial parks, and the Mission 1,000 project, which aims to transform 1,000 enterprises into ₹100 crore companies.
The Kerala State Small Industries Association (KSSA) highlighted the necessity for ₹2,000 crore in support for Mission 1,000 and ₹300 crore for establishing 100 private industrial estates. In total, they estimate an additional ₹5,000 crore is required to strengthen the MSME sector.
Support for Loan Subsidies and Small Industries
The proposed tax cut aims to make online food delivery more affordable for consumers. However, it comes with a limitation: food delivery platforms like Zomato and Swiggy would not be eligible to claim input tax credits under the new structure. This could potentially increase the operational costs for these platforms, as they would have to absorb the GST paid on their expenses without offsetting it.
Context and Recent Developments
The KSSA emphasized the importance of timely disbursement of loan subsidies to prevent penalties and adverse bank actions. They also called for parity in support between small and large industries, stressing the critical role of MSMEs in the state’s economy. Additionally, the association urged the removal of the ₹3 crore limit on financial assistance for private industrial parks.
Addressing Resource Shortages
To combat raw material shortages, the KSSA suggested that the government establish mechanisms for the collective procurement and distribution of essential materials like cement, sand, iron, and aluminum. This step would stabilize supplies and reduce operational challenges for MSMEs.
Policy Reforms for Existing Enterprises
The association proposed introducing legal measures to shield existing enterprises from baseless complaints. They also advocated for allowing the use of fallow land for industrial purposes and urged the government to prioritize sediment removal in rivers, with the extracted sand distributed to industries.
Infrastructure Development and Tourism Support
Finally, the KSSA appealed for greater investment in infrastructure, emphasizing its potential to bolster the tourism industry and create ancillary opportunities for MSMEs.
