New Delhi, January 2 (KNN) Leading industry associations representing India’s Micro, Small and Medium Enterprises (MSMEs) have made comprehensive budget recommendations focusing on regulatory relief and better access to finance.

The proposals are aimed at addressing the key challenges faced by the sector, which plays an important role in the country’s economy.

The India SME Forum, which represents more than 98,200 MSMEs, has proposed exempting businesses with a turnover of less than Rs 5 crore from routine audits and inspections, saying such monitoring would involve significant discrepancies. Reserved for cases.

The organization also advocates for a more lenient approach to compliance, including a formal amnesty program for minor GST-related violations and simplified procedures for reinstatement of canceled GST registrations.

To streamline the payment system, industry bodies have recommended integration of the Trade Receivables Discounting System (TReDS) with the GST framework and the Government e-Marketplace (GeM) portal.

The integration will enable automatic flagging of unpaid invoices on buyers’ GST portals after the payment deadline has passed following the recommendations of the Standing Committee on Finance led by Jayant Sinha.

The Federation of Indian Micro, Small and Medium Enterprises (FISME) has highlighted key concerns regarding the Special Mention Account (SMA) framework, noting that the current system often discourages businesses rather than renewing them. Leads to shutdown.

The organization emphasizes the need for comprehensive guidelines focused on rehabilitating struggling businesses rather than simply identifying stressed accounts.

FISME has also proposed reforms in banking practices, suggesting a shift towards need-based financing that incorporates cash flow analysis.

The organization advocates for a reduction in collateral requirements for MSMEs demonstrating continued fiscal responsibility, arguing that this will allow businesses to reinvest in growth while maintaining financial discipline.

The recommendations come at a crucial moment as India’s services exports have overtaken merchandise exports for the first time. With MSMEs contributing about 50 percent of goods exports, FISME has urged EXIM Bank to revise its lending criteria, particularly the requirement that exports should be more than 10 percent of total sales.

The organization suggests maintaining a more reasonable threshold to support emerging exporters, especially for credit-backed orders.

(KNN Bureau)