Budget 2025-26: Assocham seeks further ease of doing business, credit flow for MSMEs

In order to further empower micro, small and medium enterprises (MSMEs) and ensure ease of doing business, there is a need to establish integrated infrastructure townships and universities to promote skill development and entrepreneurship training as well as to foster growth within the sector, Assocham said on Monday.

In its pre-budget meeting with Finance Minister Nirmala Sitharaman, the apex trade chamber sought a slew of measures to encourage investment, including extending the scope of presumptive taxation to MSMEs and new age businesses like data centres, data hosting, cloud computing.

According to Sanjay Nayar, President of Assocham, this would help simplify compliances in the hands of such taxpayers by computing income on a predetermined basis, thereby reducing the apprehension of tax disputes and litigation.

“It also enables businesses to avoid complex audits/bookkeeping while knowing their tax liability in advance, allowing businesses better financial planning and management,” Nayar added.

He also highlighted the need to develop integrated infrastructure townships for MSMEs (a revised version of the old Industrial Estate Development Programme) across the country.

These townships may include common testing and R&D facilitating centres, financial institutions, common service providers, housing for labour, schools, hospitals, training centres for labour and export assistance centres, among others.

Despite the policy for collateral-free loans, MSMEs still face challenges in accessing credit.

Banks often request personal property collateral and charge higher interest rates, hindering credit access.

Nayar stated that it must be made mandatory for banks to disclose the number and amount of collateral-free loans granted periodically.

The upcoming budget provides an additional allocation or net to enhance credit flow to the MSMEs, much like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) launched during Covid-19, which proved to be a lifeline driving the growth of MSMEs.