Ludhiana: As finance minister Nirmala Sitharaman prepares to present the Union Budget on Sun, Feb 1, this industrial hub is demanding urgent structural reforms to pull the MSME (micro, small, and medium enterprises) sector out of a deepening crisis.Top of the agenda for the “Manchester of India” is the elimination of the inverted duty structure, which local manufacturers say has “crippled” their working capital. Currently, many raw materials attract 18% GST, while finished goods like bicycles are taxed at only 5%, forcing businesses into a “labyrinth of documentation” to claim tax refunds.Industrial bodies, including the UCPMA and CICU, have outlined a comprehensive roadmap for the finance ministry, and the demands include GST rationalization, special Punjab package, technology upgradation, and freight subsidies.The local industry wants the govt to abolish the inverted duty structure. Industry leaders argue that GST on finished products should be equal to or higher than raw materials to eliminate the need for convoluted refunds. I has given a renewed call for a federal economic stimulus to counter the state’s slowing industrial progress and address the high logistics costs faced by landlocked states.It made a proposal to allow companies to use 50% of their CSR (corportate social reponsibility) funds specifically for technology modernization in textiles, auto components, and sports goods over the next five years. It wants essential support for exporters to bridge the competitive gap caused by Punjab’s distance from major sea ports.The bicycle-and-parts industry seeks stronger anti-dumping measures against cheap imports, besides research and development support for indigenous EV (electric vehicle) technologies. Exporters look for income-tax rebates similar to those provided during the 1991 currency crisis to offset the weakening rupee. Partnerships search for tax parity between traditional partnership concerns and LLPs to encourage reinvestment. LLPs or limited-liability partnerships are hybrid business structures blending partnership flexibility with corporate liability protection.Steel users demand creation of a regulatory body to stabilise erratic raw material prices, which have surged uncontrollably. With many Ludhiana units transitioning from conventional parts to EV components, there is a strong push for the government to extend EV incentives beyond the current FAME framework. “The industry needs simplified compliance and resolution of mixed-land use issues,” stated Rajnish Ahuja, president of the Apex Chamber of Commerce. “We are contributing to the nation, but without a targeted revival package, the local industry is lagging dangerously behind.”
