Like farm sector, MSMEs should get soft loans, say trade bodies on Karnataka budget

A file photo of the food park in Tumakuru. Karnataka has over 6.5 lakh industries, largely comprising MSMEs.

Karnataka Budget 2023-24 is a mixed bag and one of missed opportunities for micro and small-scale industries given that it is an election-eve budget, said K.N. Narasimha Murthy, president, Karnataka Small Scale Industries’ Association (KASSIA).

Expressing its disappointment, the trade body observed that the budget came months before the Assembly elections but did not offer soft loans for MSMEs like it did for the farm sector, also a much deserving segment post-pandemic. There was no specific allocation for providing infrastructure in private industrial estates, which is one of the burning issues affecting an overwhelming majority of MSEs in Karnataka.

“Over 90% of the entrepreneurs operate in private industrial estates where they lack even basic infrastructure, which the budget should have recognised and done justice to. Also, the budget could have included an assurance not to hike power tariff for MSEs, and reduce consent fee charged by the Pollution Control Board, for a prescribed period until they come out of the effects of the Covid pandemic,’‘ Mr. Murthy added.

KASSIA questioned the veracity of the proposal to set up world class plug-and-play industrial parks around Bengaluru when there is no land available for the same. The proposal to set up new industrial clusters in nine districts was not new, but a rehash of previous promises made by the government.

The decision to set up mega and mini textile parks across 25 locations in Karnataka would spur job creation at district-level, paving the way for holistic development, as suggested by KASSIA in its pre-budget memorandum.

“The budget was inclusive and has addressed key critical areas by promoting industry, energy transmission, welfare of unorganised workers, skill development and entrepreneurship training,” said L. Ravindran, president, Bangalore Chamber of Industry and Commerce. “The higher allocation to Bengaluru to expand road infrastructure and metro connectivity to decongest the city is a welcome move.’‘

Sanjeev Gupta, CEO, Karnataka Digital Economy Mission, said the expression of interest to invite private organisations to build integrated townships in Mysuru, Chikkaballapur, Chitradurga, Haveri, Kolar, and Ramanagaram under the Public-Private-Partnership model would definitely help develop the State’s start-up ecosystem beyond Bengaluru, and help Karnataka achieve the national $1 trillion digital economy target set for 2025.

“We welcome the announcements made by the government for the start-up ecosystem in the State, including the proposal to establish a state-of-the-art start-up park near Kempegowda International Airport at a cost of ₹30 crore, industrial clusters in nine places, and construction of airports in Davangere and Koppal,’‘ he said.