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Kassia seeks restoration of 15% price preference for SMEs

The Karnataka Small Scale Industries Association (Kassia) has urged the state government to reinstate 15 per cent price and purchase preference for small-scale industries in order to make them competitive when compared to large and medium enterprises.

“Some of the corporations like the KSRTC adopted a policy where the SMEs were asked to match L-1 rates of large industry. Some corporations paid 15 per cent higher price to the SME supplier. Because of the ambiguity in the procedure adopted by each department in the 15 per cent price preference, this policy for the government corporations and public undertakings has been withdrawn and at present no SME can supply materials to any of the government undertakings,” Prakash N Raikar, president, Kassia said.

In a pre-budget memorandum submitted to state chief minister D V Sadananda Gowda, who also holds the finance portfolio, Kassia has requested the government to reinstate the 15 per cent price and purchase preference and prescribe a procedure as in the case of KSRTC, where if the SME supplier is ready to match L-1 price of a large manufacturer, he should be given preference.

The association has also demanded the creation of a new post of development commissioner for SMEs and an independent secretariat for the SME sector to ensure continuity and concentration on the SME sector.

Kassia has urged the chief minister to levy a 4 per cent value added tax on industrial inputs as in Tamil Nadu and other states irrespective of the end product based on self certification and presentation of affidavit by the entrepreneur.

Raikar said, Kassia represents 300,000 small-scale industries in Karnataka and has over 62 years of experience in dealing with the issues relating to small industries. In order to help the industries safeguard their interests there is a need to provide representation to Kassia on the boards of Karnataka State Pollution Control Board, Karnataka Industrial Area Development Board and Karnataka State Financial Corporation, he said.

Among other demands, the association has requested for exempting SMEs from taking trade licence to industrial segment as they are governed under several other acts and release of pending budgetary grant of Rs 1 crore to Kassia for building Kassia Bhavan in the 2009-10 budget. It has also urged for expediting introduction of one time settlement scheme for seed money loan.