Enlightening MSMEs with the new era of financing
Although the Indian Micro, Small and Medium Enterprises form the backbone of the national economy, absence of smooth flow of finance has crippled its growth...
In India, 80 million people work in MSMEs and the sector has 37 per cent contribution to our GDP. However, till date the sector has lacked due attention and capital crunch has drastically affected its growth. With a view to burgeoning awareness of the new financial regime among MSMEs, IMC Chamber of Commerce and Industry in association with its knowledge partner KPMG, organised its 9th Banking and Financial Services Conference. During the conference which was held in Mumbai, a white paper titled ‘Catalysing MSME Entrepreneurship in India’ was launched. The event was also patronised by the World Bank Group as associate sponsor; Aditya Birla Financial Services, RBL Bank, FRB and Gaja Capital as theme sponsors; and SBI, NeoGrowth and SIDBI as co-sponsors. Focus on transformation
In his welcome address, Deepak Premnarayen, president, IMC Chamber of Commerce and Industry delivered an overview of the fast-changing business scenario in the country. He also touched on the overall presence and contribution of the MSMEs in the country’s GDP and the need for strategic financial assistance for smooth running and growth of their businesses, post GST (Goods and Services Tax) days. He reminded, “The Indian economy is likely to emerge as one of the leading economies in the world, poised to become a USD 5 trillion economy by 2025. Thus, a major impetus is to be made to strengthen the MSME sector as this has been a significant contributor in generating employment and contributing to the nation’s economy.”
The conference was graced by an august gathering which included representatives from various Indian MSMEs and finance institutions. Union minister for finance,
Arjun Ram Meghwal who was the chief guest of the conference, highlighted the steps taken by the union government to usher into a regime of new economic era. He said after last year’s demonetisation, the country has moved towards digital transaction. Earlier, the income tax assessment of the MSME sector was done on 8 per cent of the turnover, now after MSMEs have started digital transaction, it is being done on 6 per cent of the turnover, and thus the sector has got a direct benefit. Also, reduction of corporate tax for MSMEs from 30 to 25 per cent is a big boost for them. Meghwal, extremely optimistic about the positive outcomes of the GST, declared, “2017 will be known as the year of economic reform of the country.”
The guest of honour in the conference, Urjit Patel, governor of RBI (Reserve of India), highlighted the need for streamlining the taxation system. Suggesting adoption of latest technology in business arena, the RBI Governor stated, “Digitisation and application of information technology in the financial processes will gradually help in bringing down the tax burden on the MSMEs.”
While addressing the assembly, the other guest of honour, Pravin Gordhan, former finance minister, South Africa, stressed on the uniformity of taxation, construction of an economic framework and adopting global values for the growth of the business eco-systems. Asserting the merits of the GST, he opined, “India will find the benefits of GST in next five to six years.” Better capital flow is essential
Expressing great satisfaction on the government’s move with GST, Junaid Ahmad, country director (India) of The World Bank, opined that GST would drive away inefficiency in many areas of business. Confidently, he explained, “India is the fastest growing country in the world today. With GST and other financial reforms, the country will grow at 8 per cent.” Complete article can be found here: https://goo.gl/qetRM6 Need for an architecture that works
An obvious reason behind the slow or no growth of the Indian MSMEs is absence of adequate policy framework, which needs to be developed. Along with moderator Neelkanth Mishra, MD and India Equity Strategist at Credit Suisse; a team of panelists including Sopnendu Mohanty, CFO, Monetary Authority of Singapore; Ajay Kapur, deputy MD, SIDBI; Ajay Shah, professor, National Institute of Public Finance and Policy; and Vijay Dhingra, partner, Deloitte India – participated in a discussion on the present policy framework and the needs for various structural changes.
Digital technology and small businesses
Many MSMEs are yet to reap benefits from effective utilisation of internet (ecommerce) and mobile (mcommerce). The technology session of the conference delivered valuable inputs in this regard. Followed by a brief introduction by Shinjini Kumar, head consumer banking, Citi Bank (India); Ariel Resnik, CEO, Paretix, Israel; Rajiv Aggarwal, director, Boloro India; Chaitra Chidanand, cofounder and president, Get Simpl Technologies delivered briefs on the modern technologies that are making cash flow easier. The session was followed by a panel discussion including eminent field experts like Sharad Sharma, co-founder and Governing Council Member, ISPIRIT Foundation; Tal Sharon, MD, Equitech Financial Consulting, Israel; Sashank Rishyasringa, co-founder and MD, Capital Float and Neha Punater, partner and head – digital strategy, innovation and fintech, KPMG India. An impactful conference
Chartered accountant Noshir Captain, partner, Chaturvedi Sohan & Co., informed, “I have got an overall idea on how the finance should be looked into in the coming days. I will say that this conference has drawn a very clear picture on the role that GST will play.”