Consulting Engineers Association of India (CEAI) an apex body of consulting engineers in the country has urged Mr Nitin Gadkari, the Union Minister for Micro Small and Medium Enterprises (MSME) and Road Transport and Highways for reclassification of MSME to allow registration of Indian Consulting Engineers Companies (INCE) to take advantage of slew of initiatives announced for the MSME sector and to compete with multi-National Consulting Companies (MNCE) in the Indian soil.
“There are a number of good Indian Consulting Companies with annual turnover in the range of Rs. 250 Crore. to Rs. 400 Crore. These companies are struggling despite the large turnover, on account of COVID-19 slowdown, delays in payments by Clients, wrong practice of GST deduction/ non-payment adopted by Clients and delays in refund of Income Tax. Despite these internal challenges and international competition, these firms are carrying the Indian flag forward while delivering. However, they are unable to take advantage of the slew of initiatives announced for the MSME sector. “ said Mr Amitabha Ghoshal, President, Consulting Engineers Association of India (CEAI)
“For India to go local, it has been announced that the global tenders up to Rs. 200 Crore will be disallowed, to safeguard the interests of the Indian Consulting Engineering (INCE) Companies from unfair competition from foreign companies, or Multi-national Consulting Companies (MNCE). It is pertinent to mention that INCE Companies are competing both in India and abroad against Multinational Consulting Engineering (MNCE) Companies, all of whom have deep pockets, low cost funding, foreign Government backing and international resources. All tenders with an estimated fee of Rs 200 Cr. must be restricted for “Indian Firms” only.” Said Mr K K Kapila, Chairman, CEAI Infrastructure Committee
“In order to ensure that the above intention is translated into reality, and the Indian Consulting industry and INCE Companies are truly supported, MSME should be reclassified as only those who are “Indian firms”. Non-Indian Firms should not be allowed to register under the MSME category and draw the benefits actually meant for the Indian entities, which is happening in the current scenario because of the lacunae in registration of the Foreign Firms in India, being treated as Indian firms though they are wholly owned subsidiaries of foreign companies.” Said Mr. Kapila
“There is current practice in most Government Tenders to have pre-requisites that are too stringent for INCE Companies to meet and this results in award of large Consulting assignments to MNCE Companies. There is a need to review all tenders issued by the departments to encourage and support INCE Companies and thus the pre-requisite criteria for bidding should be such that the lead firm must be an “Indian firm” and they may, in turn be encouraged to tie up with MNCE Companies who have the desired pre-requisites to take up the assignment. Also the share of the Lead Firm or INCE Company should be a minimum of 40% in such tenders. This will ensure both monetary and professional growth and development of the INCE Companies to be global players.” Mr Kapila added.
“In fact, while the Government has re-fixed the criteria for MSME to Rs.100 Cr. turnover with Equipment investment of Rs.20 Cr. for giving certain benefits to the sector, the Cabinet decision and Amendment Bill introduced in the Parliament in 2018 was for a turnover of Rs.250 Cr. The Finance Act 2019 effected Rs.400 Cr. turnover limit for deciding medium sized companies for income tax purpose. This turnover should be excluding the international earnings” he said.