The micro, small and medium enterprises have something to cheer about with Union finance minister proposing 5% reduction in income tax for companies with turnover upto Rs 50 crore.
Increase in allocation for infrastructure spending would going to benefit many industries including MSMEs, said Nimish Phadke, managing director, Federation of Kutch Industries Associations (FOKIA).
Stating that lowering of income tax for smaller firms is a major boost to MSMEs, KT Patel, vice president, Gujarat Chamber of Commerce and Industry (GCCI), said, "Thrust on infrastructure would bring more projects to the smaller firms.Cottage industry would also get a boost."
Rajiv Vastupal, Gujarat State Council chairman of FICCI welcomed the reduction of income tax to 25% for MSME with annual turnover less than Rs 50 crore. "MSMEs are the backbone of Gujarat's economy and hence this reduction will benefit the state's economy and its industries," he said.
However, some MSME players claimed that tax reduction is hardly any relief. "We require a sound policy . There are many schemes but businessmen are unable to avail them because of the rigid norms," said Parag Tejura, president, Saurashtra Vepar Udhyog Mahamandal. "Today, we can get Rs 10 lakh car loan in a few minutes but getting the same loan for business it takes at least a year," he added.