KASSIA (Karnataka Small Scale Industries Association) has made a series of progressive recommendations to the 16th Finance Commission and submitted the point to Dr Arvind Panagariya, Chairman of the Finance Commission, with a vision to bolster the growth and sustainability of Micro, Small, and Medium Enterprises (MSMEs) in Karnataka, and address critical challenges and drive forward the economic engine of the State.
M.G. Rajagopal, President of the KASSIA attended the 16th Finance Commission on the invitation received from the Principal Secretary to the Government, Commerce & Industries Department, GoK at Taj West End Hotel, Bangalore. “At KASSIA, our mission is to support and enhance the capabilities of our MSMEs, which are the backbone of Karnataka’s economy,” said Sri Rajagopal. “Our recommendations to the Finance Commission are crafted to create a more supportive environment that will allow our small businesses to thrive and contribute significantly to the state’s prosperity.”
Enhanced Access to Finance
Enhance support for MSMEs through lower interest rates on loans to ease financial pressures. Simplifying loan processes with reduced paperwork and faster approvals will further help small businesses access the funds they need. Additionally, increased subsidies and grants are recommended for sectors hit hardest by recent challenges, such as tourism and hospitality.
Tax Relief and Incentives
Temporary reductions in GST rates and other taxes for MSMEs can boost cash flow and competitiveness, apart from tax incentives for those investing in digital technologies and e-commerce platforms, ensuring they stay ahead in an increasingly digital world.
Support for Infrastructure Development
The development of industrial clusters and Parks with shared facilities will significantly cut operational costs. With over 90% of Karnataka’s MSMEs operating from private estates, urgent attention is needed to improve these facilities. Enhanced transportation and logistics support will also facilitate easier movement of goods and services.
Capacity Building and Skill Development
To prepare our workforce for the future, government-funded training programs focused on digital marketing, finance management, and technology. Establishing mentorship programs will provide invaluable guidance from experienced entrepreneurs.
Ease of Doing Business
Simplifying registration and compliance procedures, along with implementing a single-window clearance system, will reduce bureaucratic red tape and make it easier for MSMEs to operate efficiently.
Support for Innovation and Research
Grants for innovative projects and partnerships between MSMEs and research institutions to foster technological advancements and innovation.
Promotion of Sustainable Practices
Incentives for adopting green technologies and financial support for obtaining environmental certifications are crucial for encouraging sustainable practices among MSMEs.
Sector-Specific Support
Special focus is needed for the tourism and hospitality sectors, with targeted marketing campaigns and infrastructure support to aid recovery from the impacts of the COVID-19 pandemic.
Feedback Mechanisms
Regular consultations with industry bodies to adapt to evolving needs and realities to ensure that policies remain relevant and effective.
Rajagopal concluded, “These recommendations reflect our commitment to creating a robust and resilient MSME sector in Karnataka. We believe that with these strategic measures, the 16th Finance Commission can play a pivotal role in empowering our small businesses and driving the state’s economic growth.
