- May 2, 2019
- Posted by: Anish
- Category: Feed
India has approximately 63 million Small & Medium Sized Businesses (SMEs), and their owners were an important support base for Mr. Modi’s 2014 electoral success, attracted by his promises to tackle corruption and crony capitalism.
But SME’s, who tended to rely heavily on cash transactions, were hit in 2016 by PM Modi’s controversial withdrawal of higher-value banknotes that accounted for 86 percent of currency in circulation. The introduction of the GST in 2017 was another blow. Many SME’s complained that their effective tax rates had increased and that they were struggling to fulfill the compliance burden under the new system.
These policy changes have created a sentiment of skepticism amongst the small business owners of India creating a potential vulnerability for PM Modi’s government for the 2019 elections going on in the country right now with results due on 23rd May 2019.
So, the question now arises, what do the SME’s want from the newly elected government in 2019? Maybe more growth and less red tape?
The sentiment in the Indian market represented by small businesses and MSME’s wants the newly elected government to focus on the objective of achieving robust growth, eliminating red tape and advancement of technology and innovation in the Industry.
What are the MSME’s & SME’s asking in 2019 Elections?
The Lok Sabha elections have politicians promising a lot of development and infrastructure to small businesses, including a wider budget and promise of jobs. However, the MSME & SME industry has some specific demands.
Political parties have released their manifestos earlier this month, so what are the demands from the small business and are promised by the contesting parties ready to meet these demands?
Ease of Doing Business
Small Businesses and Startups alike want to conduct their business in a fair, transparent and easier manner supported with less paperwork, reforms, etc. tying them down.
During the Modi Government, India was promoted to 77th rank in the ease of doing business index by World Bank but the SME’s are demanding specific reforms, from tax reductions, better funding for startups and more employment opportunities.
“We definitely expect further progress in the Indian economy and more ease of doing business [under the new government]” Rajesh Mehta, chairman of Bangalore-based Rajesh Exports, told the Nikkei Asian Review.
Development & Refinement of the Agricultural Sector
Agricultural Sector is the Primary source of GDP in India and the SME’s operating under this sector are demanding for better infrastructure to carry out operations which is favorable to the entire country as any development in rural income leads to higher demand for industrial goods and services.
Demands include tools to boost irrigation facilities and cold storage requirements to meet the dynamic weather conditions. Regressive technology still poses a problem for farmers and small business owners who still do not have access to basic amenities for their daily business needs.
The political gimmick, however, revolves around the promise of loan waivers, but farmers and businesses alike are hoping for it as it will take care of any crushing debt woes that they face.
Infrastructure for Technology & Job Opportunities
As the quote goes “Digital India” by BJP who is the frontrunner in the elections, their promise to facilitate an establishment of 50,000 new startups in the ecosystem by 2024, through the creation of 100 innovation zones in urban local bodies is under watch.
Initiatives by Modi Government such as “Digital India” or “Start-up India” helped a lot of MSME’s go online. As such SME’s are expecting the government to bring technology to the forefront of business growth. Small business owners are aiming towards getting better credit for their businesses, to invest in more labor.
Efficient & Effective Tax Reforms?
Is it really necessary for a business owner with a turnover of 50 lakhs to file the same returns as Reliance Group or Tata Group with billions in turnover?
Promoting Women Entrepreneur’s
From decades, a demand from SME’s is to enhance and promoted women participation in the businesses which will not only help in women empowerment but will create a number of jobs in the economy.
Indian SME’s are more aware, more diligent and are speaking up as the 2019 elections will be a game changer for the Indian economy as the country is at the peak of its growth and if supported by right policies by the newly elected government can do wonders both domestically and internationally.