Union Budget 2016: Focus should be implementation

The definition of a start-up should be from date of commencement of business and not from date of incorporation of company, says Neeraj Mittal, JMD, Bonita India
Budget 2016

The definition of a start-up should be from date of commencement of business and not from date of incorporation of company, says Neeraj Mittal, JMD, Bonita India 

Start-up mind set should move beyond technology disruptions and investment should start flowing towards hard core manufacturing as lot of private money has already been invested in technology driven disruptions.

To make real impact of these policies, Govt. need to learn from Private Sector & appoint Business Development Managers at places like SIDBI & MSME, who should visit entrepreneur and facilitate investments in industry to generate more jobs. Till people sitting in Govt. organisation becomes accessible and move out of their comfort zone, nothing much will change at ground level. Governance should be brought to door step of entrepreneur in real sense.

Organizations in the Manufacturing Sector are looking forward to govt. policies and actions to revive the manufacturing which is reeling under pressure for the last few years.

To bring them out of this slump, they not only need a big bang reform from the government, but also require swift implementation of these policies.

Infrastructure: To support the ‘Make in India’ campaign, what India needs is effective and efficient connectivity between ports, better road and rail connectivity between ports and plants.  The sector therefore would expect a major announcement to create more facilities to enable movement of raw material into the country and transporting the finished products out of the country at competitive cost. CONCOR monopoly for internal movement of goods, should be eliminated.

Boosting the SME segment:  To truly create a backbone of manufacturing in India, it is important that the government gives enough incentives and support to the Small and Medium Enterprises as these are the ones that will create the multiplier effect for job creation. One of the main impediment is lack of banking support for start-up companies as they ask for 3 year profitable track-record & collateral. It is chicken and egg story for entrepreneur. Till Government address this matter, nothing much can move on ground.

The other major area of focus for Govt. should be to encourage creation of Indian - Global Brands like USA has done. Here, lot of hand-holding is required from Govt. side like initial funding to companies, support for filing Global & Indian patents, support to enterprise to participate in Global relevant exhibitions ( today MSME Ministry has irrelevant and rigid list of exhibitions, where industry can participate), treatment of expenses in brand building should be allowed as capital expenditure etc. This will encourage lot of innovation at product level in India.

Labour reforms:  It is one of the most critical factors which will enable entrepreneurs to invest money in manufacturing activities in India on a large scale. Though a lot has been said about labour reforms, a clear, practical and truly win-win reform has not been.

Making GST a reality: Bring GST to reality and roll that out as early as possible.
Industrial parks need to be set up near ports as done by China. These parks should have world class infrastructure + land should be leased to industry at low cost so that money is invested in plant & machinery instead of land & building. These zones should have long term stable tax policy with easy access to finance and skilled manpower.

Lot of money & time is wasted by MSME sector in monthly compliance of service tax returns, TDS returns, C form returns etc. This need more simplification. Limit of staff for compulsory PF coverage should be raised from 20 to 50 OR it can be made optional from staff perspective.

Author's Bio: The article is authored by Neeraj Mittal, JMD, Bonita India

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