BANGALORE: Expressing mixed response to the Union Budget 2012, Karnataka Small Scale Industries Association (KASSIA) said that the Union Finance Minister Pranab Mukherjee has very skillfully crafted the budget, including a few negative aspects.
The Association stated that the small and medium scale enterprises (SMEs) which form the major chunk of the country’s economy, will have to derive satisfaction only through some of the stimulus it receives from investments in other segments of the economy.
“No doubt the greater allocation of funds to credit institutions and Small Industries Development Bank of India (SIDBI) will result in better flow of credit to small industries. Also, heavy investments in agriculture and rural housing have potential to give fillip to small industry development,” it stated.
In the same manner, opportunities to venture funds will help small industries.
Terming the allocation of Rs 1,000 crore for National Skill Development funds, ‘very appropriate’ in the context of acute shortage of skills in the small industries, the Association stated that the allocation of about `200 thousand crore for defence service will result in promotion of small industries in an indirect manner eventually.
“The huge investment to the extent of Rs 50 lakh crore for infrastructure during the 12th Plan will also have a positive impact in development of small industries although the units functioning at present will have to wait to enjoy the benefit of this investment,” they said.
At a time when the small industries are expecting reduction in central excise and service tax, the two percent increase announced in the budget is an anti-climax.
“There is also no mention of reduction in cost of funds for SMEs as in the case of agriculture sector,” the forum said and opined, “On the whole, the SME entrepreneurs have to mend themselves with their professional and entrepreneurial skills for the growth of the sector without relying too much on schemes from external sources.”