Guwahati: The Federation of Indian Chambers of Commerce and Industry (FICCI) has come up with recommendations for the upcoming Assam Budget 2023.

As told to Business Northeast, some of the areas that FICCI looked into are taxation, MSMEs, greenfield projects, Information Technology Industry, Assamese Film industry and other miscellaneous areas.

Some of the important recommendations for taxation include GST refund scheme for tourism. According to FICCI, the state government can this for a period of three years to help woo tourists to the region. The GST refund could be given to hotels and tour operators, or in line with international best practice, directly to tourists on the production of tax invoices.
Secondly, it recommended GST refund for home buyers, who are unable to take advantage of the GST credit mechanism.
FICCI also recommended a level playing field for excise. Currently, hotels, restaurants and bars pay excise duty at a higher rate than liquor retail outlets. It recommended that government may consider charging excise at the same rate as charged in case of retail outlets. This will help tourism and hospitality industry greatly. Other recommendations included package for traders and unorganised units.

A number of initiatives have been taken by the central and state governments for the organised manufacturing and services sector. According to FICCI, however, no major schemes are available for traders and the unorganised sector. They suggested that the state government may consider package, including a one-time financial grant, for traders and the unorganised sector.

FICCI thanked the state government for ensuring that incentives under the policy in the form of SGST refund are being provided to the industry. However, at times, the advantage that the incentives provide to industry of Assam is being diluted due to processing delays. It, therefore, requested the release of SGST refund so that it may be processed in a time bound manner. Secondly, they recommended that necessary budget provisions should be made so that industry can avail the benefits.

FICCI wants the state to address liquidity crunch faced by industries, particularly MSMEs. For this, it recommended release of pending payments to MSMEs. All state departments and the state PSUs may collate all data of pending payment for works completed against various tenders, purchases and procurement orders issued by them. All these pending payments may be released expeditiously. This will go a long way in easing the liquidity crunch being faced by the MSMEs. Secondly, it highlighted the importance of easing of EMD and PBG requirements. The central and state government agencies require EMD and Performance security for contracts awarded to private companies.

Next, FICCI gave special importance to empowering MSME’s. It informed that over 95 per cent enterprises in Assam are in the small-scale sector. A special focus is required to bring about inclusive development of this sector. As most entrepreneurs in Assam are first generation entrepreneurs a support mechanism for first generation entrepreneurs needs to be worked out. This could include CIS limit for small and micro enterprises that could be enhanced to 50 per cent, either under the state Industrial policy.

Subsidy on term loan interest may be considered under the state industrial policy. A provision for bridge loans against subsidy applications due may be considered by the cooperative banks under the state government.
A dedicated venture capital fund specifically for such entrepreneurs may be considered. A specialised team with experience in Venture Capital Management could be created at AFC.

Incubation centre for such small enterprises should be developed in every district. The procedure for claiming benefits under state industrial policy needs to be simplified, particularly for small and micro enterprises.
One important recommendation by the FICCI is regarding financing for greenfield projects. FICCI stated that in Assam lack of adequate access to finance for businesses is a major issue. It is impeding growth of industries and generation of local investment.

The steps forwarded by them are like state level financial institutions need to be consolidated and funded to enable them to provide credit to businesses, creating /empanelling a State Level credit rating agency for rating, gradation, and certification of businesses to enable non collateral based financing at least to performing enterprises, bringing a capital intensive projects, banks and financial institutions may be encouraged to capitalise interest accruing up to the second year and fund the same, to minimize cash outflows in the initial years of operation, in sectors which are working capital intensive, the Government may consider enabling soft loans by the banks instead of grants / subsidies from the Government, in sixth Schedule areas where land rights cannot be transferred to non-tribals, banks may be impressed upon to treat lease hold rights at par with ownership, for lending purposes, a credit guarantee fund may be created to provide primary security for industries set up in such areas.

FICCI also recommended for the facilitation of IT growth. Assam has a sizeable talent pool which could be tapped by the IT industry. In the absence of a local IT industry, many of the trained IT professionals from Assam are currently working in the IT hubs of India.

To create employment opportunities for the technically qualified in Assam, it is important that large IT companies be induced to set up facilities like development centres, data centres, Training Hubs, BPOs and KPOs in Assam. Given below are a few suggestions to this end.

To promote the industry in the region it is proposed that a bandwidth subsidy may be considered. Majors may be offered a power subsidy of 50- 60 per cent if they set up a sizeable setup in Assam.

For revitalising the Assamese Film Industry, it recommended for a detailed study to understand the strengths and weaknesses of Assamese film industry. It will try to understand the changing preferences of movie goers. The study may also analyse the growth of the film Industry in the South India and elsewhere to identify opportunities for the Assamese Film Industry.

The government may consider a VGF scheme for the film makers producing Art Movies and movies that highlight cultural values of the Assamese society. The scheme may be extended to film theatres and multiplexes to popularise Assamese Movie.

A Special Incentive scheme may be devised for movies in other languages which are based on Assamese Cultural Themes.
They also reflected other issues that require attention of the Government. They specially recommended registration process under the society’s registration act: The process of registration of societies under the act is very cumbersome and time-consuming requiring submission of documents and forms through an offline process.

The process of renewal of registration every three years is equally cumbersome. To make the process more user friendly, the following steps are recommended. The entire process of registration under the societies Act may be moved to a online platform and the need for personal interface should be abolished. A system of auto renewal of registration, upon submission of requisite fees, annual reports and returns through an online portal, may be put in place.

Although the EODB portal provides for registration of firms, the applicants are generally required to submit documents in hard copy for the process to be completed. FICCI, therefore, recommended that the process of registration of firms may be carried out exclusively through the online platform and the practice of requiring submission of documents in hard copy should be abolished.

A system of auto renewal of registration, upon payment of requisite fees through an online portal, should be put in place.
The current EODB portal has a number of issues which need to be resolved, including the fact that, submission of application on the EODB portal is often not enough and submission of documents in hard copy and presence of applicant / representative in person is insisted upon by various department and agencies. Also in many cases both manual and online process are going on. We would therefore request the Government to kindly consider the following steps.
Revamp the EODB portal based on a process of feedback from a wide cross section of users of the portal. FICCI will be happy to assist in the process of seeking user feedback and to provide advisory support in building an efficient, user friendly EODB portal.

The rules pertaining to the MSME facilitation and operation act, 2020, may be notified urgently to ease the requirements for MSMEs.

Government may kindly consider issuing all licences, registrations etc for micro enterprises on the basis of self-declaration, without the need for physical inspection etc. Random inspections may be carried out if required a period of three years.

Another recommendation included the procurement through Swiss Challenge. It is important to encourage innovative ideas to address the unique developmental issues faced by the state. The Government may consider allowing the Swiss Challenge Mode of Procurement in case of Public Private Partnerships (PPP) projects and public Procurements.
Finally, the recommended accounting in Urban Local Bodies. The state has 97 Urban Local Bodies. And currently, accounts of all the ULBs in the state are being maintained in Single Entry System. Single entry system does not properly reflect the state of affairs of the organisation which often leads to inefficiencies and leakages. ULBs following single entry system have a tendency to run into losses as the financial management is poor.

To improve the working of ULBs in India, Asian Development Bank had come up with an Implementation Guide to Municipal Accounting Reforms in India. Government of India also come up with Guidelines for Accounting and Audit Reforms in Municipal Bodies. Many States in India have already made considerable progress in Conversation of accounts of ULBs to double entry system. This has not only ensured better financial management but have also paved the way for better informed budget making and consequently better financial control and performance. In some cases, it has also facilitated access to Private Capital.

FICCI recommended that the Government of Assam should initiate reforms in management of Urban Local Bodies, by bringing in Double entry accounting system.

FICCI also conducts events, conferences, and exhibitions and indulge in policy work. The Guwahati office is the only office in the region. Some of its important work includes the conduction of Advantage Assam Global Investors’ Summit in 2018 for attracting investors to Assam. It was a joint initiative of Government of Assam and FICCI as industrial. The Northeast Connectivity Summit is an annual event that takes place in different states. It emphasised the need for connectivity in the northeast region as a tool for the economic development of the state, as told to Business Northeast by a FICCI official.

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