Will the upcoming budget find some place for the MSME sector? Industry bodies of Indian Micro, Small and Medium Enterprises (MSMEs) see a ray of hope from the first budget of newly formed UPA government.

Ramesh Datla, Chairman, CII national MSME Council told SME Times that specific issues related to SME sector are Introduction of GST, Lower Interest Rates, Encouraging alternate means of financing for SMEs. (SME Exchange and FDI through NRI's) and Removal of FBT.

Meanwhile the Federation of Indian Chambers of Commerce and Industry (FICCI) has strongly recommended the support in technology up-gradation for the SME sector.

FICCI said, "It is important to upgrade the technology of this sector in order to compete with imports, to create a Technology Acquisition Fund to enable SMEs to acquire technologies wherever available and to facilitate creation of a mechanism to effectively link up the SMEs with the technology providers and users of the products."

"As also the government should minimize statutory compliance requirements for them and raise monetary limits provided for auditing and maintenance of accounts for small enterprises under Income Tax Act," FICCI added.

Besides other demands for exporters, S P Agarwal, President, Delhi Exporters Association (DEA) suggested the easy refund on service tax to small exporters.

He said, "Though exporters are exempted to pay Service Tax, they have to pay first and then apply for the refund, which is very cumbersome and hardly any exporter has been granted refund of Service Tax. Due to global slowdown some exporters have to borrow money to pay this tax."

"It is strongly suggested that exporters should be exempted from paying this tax. This will be a big relief to exporters, financially, physically and mentally.  It will  also reduce the Government cost of first collecting the fund and then making arrangements for refund," he added.

Agarwal also asked for flat rate of interest for SMEs. He said, "The present system linked with BPLR has an anomaly, since BPLR differs from bank to bank which is sometimes 2% between the two of them, thereby rendering the high interest borrower from one particular bank being rendered un-competitive against the other."

"The flat rate would help all the exporters particularly the small scale, cottage, tiny units which are not strong enough to negotiate for cheaper interest rates and other charges," he added.

But the fact is that only our new Finance Minister, Pranab Mukherjee, can tell what he has for MSMEs (the back bone of Indian economy) in his budget box.