By TIOL News Service

NEW DELHI, SEPT 27, 2017: AS per CII the four critical areas which need a booster dose, are Investments, Exports, MSMEs and Employment.

And the key suggestions are:

Investment / Demand Creation

1. Reduce interest rates by 100 basis points over the next year to spur consumption

2. Fiscal consolidation targets may be relaxed for a year or two due to exceptional circumstances.

3. Discourage state governments from curtailing capital investments. Elevate Public CapEx in highways, low-cost rural housing, rural and urban infrastructure and power (transmission and distribution).

4. Provide stable and coordinated policy regime transitions with adequate lead times and certainty e.g. environmental related regulations in auto, cement, chemicals, construction equipment, etc.

5. Lower corporate tax to 18% while removing all exemptions.

6. Define and institute clear and simple framework for claiming input tax credit. Also avoid frequent changes in rates e.g., Auto.

7. Expand coverage of GST to include electricity, oil and gas, alcohol and real estate at the earliest.

Exports

8. Allow Commercial Banks to lend more to SMEs exporters and expand interest rate subvention from 3% to 4%.

9. Compensate duty drawback benefits to keep exports cost competitive.

10. Initiate a National Standards Mission: Harmonise Indian standards with global standards.

11. Create National Standard Coordinating Agency under Cabinet Secretariat to co-ordinate across departments.

12. Set up an USTR-cum-USITC type body to strengthen trade negotiating capacity and streamline review processes for speedy and time bound trade remedial actions

13. 6 x 6 export market push (6 markets, 6-year plan).

MSME

There is a need to reduce pressure on working capital of MSME for various reasons such as GST, contract terms, etc

14. Increase SMA-1 (Special Mention Account) guidelines from 60-90 days to 180-365 days (time allowed for principal or interest payment before a loan turns into an NPA)

15. Enhance time, especially for SMEs, for payments of taxes and duties under GST

16. Create capital insurance scheme to protect MSME against delayed payments

17. Encourage alternate sources of lending, especially to MSMEs, e.g., securitization of exporters’ receivables, etc.

18. All states should be encouraged to expedite adoption of GEM, Government e-Marketplace

Employment

19. Reinstate fixed term employment for all manufacturing sectors as in extended for apparels and made-ups.

20. Discourage arbitrary fixation of Minimum Wages without taking into consideration skills levels.