The move will enable the government to find solutions to the growth bottlenecks for the sector as well as increase compliance by the units resulting in higher tax revenues for the government
Number of small businesses grew to 86 per cent in Gujarat in about 18 months, said a senior government official. He attributed the rise to the conversion of unregistered units to a registered one. The move will enable the government to find solutions to the growth bottlenecks for the sector as well as increase compliance by the units resulting in higher tax revenues for the government.
"Between August 2016 and December 2017, there has been about 86 per cent rise in the registration of Micro, Small and Medium Enterprises (MSMEs) in Gujarat. The number now stands at about 5.2 lakh," said PK Jha, zonal general manager of National Small Industries Corporation (NSIC) on the sidelines of a 'Banking and Finance Meet' organised by Gujarat State Small Industries Federation (GSSIF). The rise in the registration is a result of a campaign initiated by the central government to convert the unorganised sector into the organised sector, said sources.
"This is a clear shift towards getting small industries in the formal sector. The database now generated will give a better idea on the requirements of the industry," said Jha. Sources in the know of things said that now policy makers will be better placed to come out with funding practices and other incentives that are suited to the enterprises. Soon, one can expect separate packages for micro, small and medium enterprises as per their sizes rather than being clubbed as MSMEs in general.
Jha said that increased registration has resulted in higher filing of tax returns by the small businesses, which will pave way for higher tax realization for the government. Of the 3.98 lakh Income Tax Returns filed by the private enterprises during the fiscal, about 3.67 lakh are from MSME sector. Overall there was a 67% rise in filing of ITRs by MSMEs across the country during the fiscal.
Sources also said that with the recent reclassification of MSMEs will increase the contribution of the sector in the economy, especially in terms of investment and job creation and consequently the government will come out with mechanism to encourage the growth of the sector.
SOURCES SAID
- With the recent reclassification of MSMEs will increase the contribution of the sector, especially in terms of investment and job creation and consequently the government will come out with mechanism to encourage its growth.
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