Overall, the budget announced for the next financial year is quite business-friendly and there are some good announcements for small and medium enterprises (SMEs) as well.
However, the problem is that medium entrepreneurs in SMEs are far ahead as they are engaged in the institutional sector. And the institutional identity of cottages, micro and small entrepreneurs is far behind as they do not have a connection with the bank.
There was a big demand from us to ensure financial support to small entrepreneurs in Covid-19. The reality is that almost the entire aid package announced for the SME sector is going to medium entrepreneurs.
Recently, an incentive of Tk3,000 crore has been announced for CMSME entrepreneurs and Tk100 crore is being disbursed through various organisations including SME Foundation and Palli Karma-Sahayak Foundation. The amount is much less than needed. There is no announcement of any new assistance in the budget for small entrepreneurs.
The new budget has increased the amount of tax-free turnover for women. The amount of VAT has also been reduced in some sectors. Several sectors have received tax holiday benefits. Now the question is how many small entrepreneurs can use this facility.
Covid-19 has reduced the capital expenditure of small entrepreneurs to zero. They cannot start a business without capital. They have to come down from the entrepreneur to the worker level.
Relatively good businesses need to provide loan assistance and grant assistance to small entrepreneurs who are on the verge of collapse.
Many products produced by small entrepreneurs are being imported. Imports of these products need to be discouraged.
Imports of raw materials have been somewhat encouraged in the budget. There are no such guidelines regarding the final product. The import of footwear, leather goods and other consumer goods should be discouraged for the next three years.
Rashedul Karim Munna is the managing director of Creation Private Limited