ICC demands higher interest subvention for MSMEs

Industry body Indian Chamber of Commerce (ICC) on Friday demanded higher interest subvention for micro, small, and medium enterprises (MSMEs) on loans to boost employment generation in the country.

The city-headquartered chamber in its budget demand also called for simplification of personal taxation by lowering tax rates for greater compliance.

''The two percent interest subvention scheme on loans has truly supported Indian MSMEs. We would like to propose that the scheme be further extended with enhanced coverage. We request the government to consider 3-4 percent interest subvention to the extent of Rs 3 crore against the earlier Rs1 crore,'' ICC president Vikas Agarwal said.

Since a key agenda of the interest subvention scheme for these enterprises is to get them on-board the GST network, the relaxation will help them come under the ambit of the indirect tax regime, he said.

Speaking about individual tax, ICC also said it is necessary to reduce the personal tax rates for individuals so that there is a degree of equity and fairness about structuring decisions.

Dividend tax should also be capped at 15 percent down from 20 percent for resident assesses as well, Agarwal said.