Karnataka Budget gets just passing marks from MSMEs

In what is largely seen as a populist budget, CM Siddaramaiah’s announcements for the medium, small and micro enterprises (MSMEs) evoked a rather lukewarm response on Friday.

While industry leaders cheered the promise of a single-window portal for time-bound clearance of all applications tied to setting up a new enterprise and exemption of agricultural land up to two acres from land-use conversion for the purpose of establishing new industries, a lopsided focus emerged as a common complaint.

"We welcome the positive steps taken for the cottage industry. However, other sectors should also have been given equal consideration," said B V Gopal Reddy, President, Federation of Karnataka Chambers of Commerce & Industry.

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Moreover, a special cell called 'Mahatma Gandhi Vastrodyama' is slated to be set up in the textiles department with the aim to bring designers, weavers, yarn producers and allied workers on a common platform and make appropriate interventions for reviving the declining handloom industry in the state. In addition, free electricity for up to 250 units of monthly consumption will be provided to looms and pre-looms with a maximum of 10 horsepower (HP) connections.

Karnataka Small Scale Industries Association president C A Shashidhar Shetty emphasised that although there is good thinking reflected in the budget, immediate and direct benefits for the industry were not substantial.

Industry bodies had requested a reduction in power tariff from the current 9 per cent to 3 per cent. In addition, MSME players also anticipated a higher focus on micro and small businesses and financial support in the form of soft loans.

"For the core MSME sector, schemes to ease power tariffs and fuel subsidies are important concerns for their survival, which were left unaddressed in the current budget,” said SNG & Partners’ Subrata Mukherjee.

Industry insiders argued that with an increase in guidance value by up to 14 per cent, the property tax for industries will be on the higher side, which will further burden the MSMEs.

Industrialists welcomed the announcement of setting up an industrial township on state-owned BEML land to promote economic activities on the Chennai-Bengaluru Industrial corridor. Furthermore, seven new industrial estates will be established under the aegis of KSSIDC at Hubballi, Chittapur (Kalaburagi), Kodkani (Uttara Kannada), Kanagala (Belagavi), Badanaguppe (Chamarajanagar), Indi (Vijayapura) and Shahapur (Yadgir).

The government allocated Rs 50 crore to initiate sugarcane crushing at MySugar factory this fiscal and run it profitably. "Everything will now depend on execution and how much of each rupee allocated is productively spent on these proposed investments within the time frame envisaged," said Shetty.