Kochi, Jan. 31- Kerala State Small Industries Association has urged the Union Government to evolve a financial package for the SME sector with lower interest rates compared to that prevailing in the developed nations.

In a pre-budget memorandum submitted to the Union Finance Minister, the Association pointed out that the SME sector is at a disadvantage while availing themselves of financial assistance from lending institutions by way of paying much higher rate of interest.

The Association President, Mr A. P. M. Abdul Rahim, requested the Government to make financial assistance available to the SME sector on competitive terms. He also requested to bring SIDBI into retail banking. The Government should also enact a law enforcing all the State Governments to provide price preference, EMD / Security Deposit exemption to tiny and small scale industries. Minimum 50 per cent of all the Government / Public Sector undertakings purchases shall be sourced from micro, small and medium enterprise (MSME) sector.

The Association also demanded to find ways and means to encourage the Micro and Small enterprises to visit global fairs and exhibitions. The Union Government through the Development Commissioner is encouraging Micro and Small Enterprises to participate in International Exhibitions. This should be extended to visiting International Exhibitions too.

The Central excise exemption limit for SSI Sector should be enhanced to Rs 3 crore and eligibility criteria of the previous year’s clearance shall be raised to Rs 7 crore. The single tariff rate shall be maintained for SSI products and maximum rate brought to 8 per cent. All agri-products should be exempted from the purview of Central Excise.

All SSI units shall be given Income Tax exemption for the first three years from the date of commercial production. Service tax limit be enhanced to Rs 25 lakh and Registration limit to Rs 15 lakh. The Compulsory tax audit limit shall be enhanced to Rs 1 crore.