Finance Minister Nirmala Sitharaman on Friday announced much needed measures to boost the subdued micro, small and medium enterprises (MSME) sector.
On the loan front, announcements were made regarding the facility for MSMEs to track loan applications online. Apart from fiscal and reform measures, the government has also decided to soon shift to a single definition for MSMEs. Industry has expressed concerns over penal provisions for non-compliance with Corporate Social Responsibility (CSR) requirements in the amended Companies Act, 2013.
On measures to boost the economy, Sitharaman said the government respects and honours wealth creators. “CSR violations... not be treated as criminal offence and will be civil liability,” Sitharaman, who also holds the charge of the corporate affairs ministry, said. The government has provided companies through revised orders more time for completing ongoing projects as part of their CSR obligations. Under the Act, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
To address concerns over alleged harassment of taxpayers, Sitharaman said it has been decided that from October 1, all notices, summons, and orders of the Income Tax Department would be issued through a centralised computer system and would also have a computer generated unique Document Identification Number.
Act on global Cos abusing Indian firms
The Finance Minister asked fair market regulator the Competition Commission of India to guard Indian businesses and consumers against foreign companies, which have no presence in India, by taking suo motu action against them. “Physical borders no longer determine competition within a country and that way we are not dealing with fair play, as it is. We are dealing with an entity which is outside, probably legally, complying with many of the requirements in the jurisdiction in which it exists, but having an unfair impact, on the consumers here. If that is not abuse, then what can be? And if that abuse is being felt by Indians?
“In the G20, the whole discussion today is about how you would define operations, how you would define profits or turnovers which are generated in a geographical physical area where one doesn’t operate. Physically, you are not present, but you are making a turnover and earning your profits in an area, which is jurisdictionally different from where you are.”
“If that’s the way global competition is evolving and it is not evolving in some way whose impact is not on us, whose impact is so much on us that we are still probably wondering as to how we are going to rein in that kind of, if I may use the word, abuse. It is not always abuse, but it is a smoking gun. That’s the smoking gun which governments, not just in India, but also in countries far ahead of us in understanding competition law are confronting,” Sitharaman said.