CII Demands Incentives for MSMEs and Exporters
The Confederation of Indian Industry (CII) has demanded incentives from the central government for micro, small, and medium enterprises (MSMEs) and exporters amid the crisis in West Asia. The organization appreciated the 'timely, balanced, and coordinated' steps taken by the government and the Reserve Bank and released a 20-point agenda on Sunday.
This agenda includes suggestions for providing easy and affordable capital for MSMEs, strengthening loans and insurance for exporters, and reducing taxes on energy sources. CII's Director General, Chandrajit Banerjee, stated that the initial measures by the government and the Reserve Bank have helped stabilize market sentiment and demonstrated that the country's policy framework is robust and capable even in the face of external shocks. He mentioned that India's past experiences indicate that coordinated fiscal and monetary measures help enhance resilience.
The next phase should focus on targeted liquidity support, loan facilities, trade cost management, and foreign exchange stability. The CII's press release noted that supply-side pressures remain in energy, logistics, and trade channels. According to feedback from the industry, initial policy measures have reduced immediate impacts, but many sectors, especially MSMEs, exporters, and energy-intensive industries, continue to face operational and financial pressures.
CII has called for a credit line guarantee scheme for emergencies to provide additional working capital to MSMEs and affected sectors without collateral. It has also demanded a three-month moratorium and loan restructuring facilities for MSMEs and exporters, along with a special refinance window. The industry organization has requested an extension of contract deadlines with public enterprises by three to four months and a reduction in eligibility criteria for bank guarantees.
Additionally, it suggested increasing the working capital loan limits, especially for export-oriented units. A temporary waiver or reduction of banking fees for MSMEs has also been proposed. The organization advocated for expediting GST refunds for industries and a temporary reduction in taxes and duties on raw materials like LNG for the energy sector.
To encourage foreign investment, a temporary exemption from long-term capital gains tax has been suggested. CII has called for the development of a crisis response framework for MSMEs, linking fertilizer subsidies to the direct benefit transfer system, and providing a special foreign exchange swap facility for public oil and gas companies. It emphasized the need for flexibility in lending criteria for the primary sector, increased coordination among various institutions to strengthen export credit and insurance frameworks, and the development of a coordinated mechanism between various ministries and the industry to improve crisis monitoring and policy response.
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