FACSI Pushes for Tax and Credit Relief for Small Businesses in 2026-27 Budget
The Federation of Associations of Cottage and Small Industries (FACSI) has made a strong appeal to the central government. They want tax, credit, and regulatory relief measures for micro and small enterprises (MSEs) in the 2026-27 Union Budget. This move aims to sustain their growth and strengthen their role in India's industrial ecosystem.
Key Demands Outlined in Pre-Budget Letter
In a pre-budget letter to Finance Minister Nirmala Sitharaman, FACSI President H K Guha detailed the recommendations. These were framed after consultations with various entrepreneur associations and MSE groups across the country. The industry body highlighted several critical demands to support small businesses.
Among the key proposals, FACSI called for:
- The constitution of an exclusive council for small and micro enterprises under the Ministry of MSME.
- A higher exemption threshold under the GST regime.
- A single, simplified GST return for small units.
Credit and Liquidity Support Measures
FACSI also proposed significant credit support for MSEs. They suggested statutory collateral-free lending of up to Rs 1 crore at an interest cap of 6-7 percent. The federation emphasized interest subvention during financial stress and automatic renewal of working capital limits for compliant units.
Addressing liquidity concerns, FACSI demanded GST refunds within 15 days. They want statutory interest for any delays. The body also pushed for complete decriminalisation of procedural lapses under GST, labour, and local laws.
Support for Export-Oriented Units and Tender Processes
For export-oriented units, FACSI suggested creating an Export Risk Equalisation Fund. This fund would support small exporters affected by sudden tariff hikes. The letter also called for higher lending targets by SIDBI and public sector banks.
FACSI sought a reduction in fees for MSEs submitting tenders through the GeM portal. They advocated for stronger functioning of State Facilitation Councils to address delayed payments effectively.
Need for Legislative Amendments and State Coordination
The federation observed that some measures would require amendments to the MSMED Act, 2006. Guha stressed the need for closer coordination with state governments. This coordination should extend subsidies on renewable energy installations, electricity charges, and local levies.
Special facilities for units in industrial estates managed by state development corporations were also requested. Guha stated, "These measures will be a significant enabler for the growth of MSEs in India."
FACSI's comprehensive proposals aim to create a more supportive environment for micro and small enterprises. They believe these steps will help sustain their growth and enhance their contribution to India's economy.
