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Journalism of Courage
Industry body, Associated Chambers of Commerce and Industry (Assocham), and tradeindia.com have conducted a joint survey on ‘How to make SMEs more competitive’. The report estimates that due to administrative framework and substantial hike in the interest rates from 7 per cent to 15 per cent for SMEs, their productivity has gone down to 30 per cent and if it continues SME’s contribution of 60 per cent to total export proceeds of India will be affected.
Assocham SME committee chairman, Bikky Khosla said that the number of inspectors examining various records of SMEs is increasing and might exceed 45 with new services being brought into tax net.
The rate of interest for SMEs which should have been ideally at 10 per cent, in reality is 15 per cent which is totally unserviceable and hurts productivity of SMEs to the extent of 25 per cent, he said. The Chamber has suggested that there should be only one inspector for examining the records of SMEs in PF, excise, bonus, sales tax etc. and likewise sectoral arrangements should be made in a manner so that one inspector is made incharge of 5 different functions of SMEs. Speaking on the occasion, secretary general Assocham, D S Rawat said that the procedural issues faced in raising loans include lot of paperwork, collateral security, high processing fee and prepayment charges. “Banks are not cooperative in promoting the new projects and even if they do show an interest, the time taken to sanction loans and the risk averse attitude of bank managers is astounding,” said Rawat.
