Maiden Budget of Nirmala Sitharaman to Create Opportunities for the MSMEs in India
Right at the moment when the Indian economy was showing signs of a slowdown, the Modi government came up with its first budget, which is believed to improve the economic condition of India along with improving the MSMEs existing in the country.
Micro, Small and Medium Enterprises (MSME) account for 8 per cent of India's total GDP. The sector was badly hit by demonetisation and GST reforms and it was felt that MSMEs were ignored in the interim budget presented before LokSabha election 2019.
The Union Finance Minister, NirmalaSitharaman, on Friday proposed a booster for Micro, Small and Medium Enterprises (MSMEs) under which the overall operations and the existence of this sector are believed to get enhanced in the upcoming time.
MSMEs could enjoy Loans up to INR 1 Crore
In order to facilitate easy access, loans up to INR 1 Crore will be granted to MSMEs within 59 minutes. The loan will be approved and credited in the account through a dedicated online portal.
Furthermore, the government is ready to launch a payment platform for MSMEs to enable them to pay bills and save time. The government will also be extending pension benefits to 3 crore retail traders and shopkeepers who are having revenue of less than INR 1.5 crore. This initiative will be popularly known as the PM Karam Yogi Maan Dhan scheme.
Stand Up India Scheme to continue till 2025
The main objective of ‘Stand Up India’ scheme is to promote entrepreneurship among women and scheduled castes and tribes. Nirmala Sitharaman in her maiden budget declaration announced that the scheme will continue to roll till 2025.
Anchored by Department of Financial Services (DFS), Ministry of Finance, and Government of India, the scheme facilitates bank loans between INR 10 lakh and INR 1 Crore to at least one Scheduled Caste or Tribe borrower and at least one woman borrower per bank branch in order to set up a Greenfield enterprise. This enterprise might include segments like manufacturing, services, and trading.
Relief on Angel Tax and Interest Subvention for Startups
The new budget is believed to bring relief to startups and MSMEs existing and operating in today’s Indian business ecosystem. As per the new budget, angel tax will not require any scrutiny from the Income Tax Department for startups.
Also, 2 per cent interest subvention for GST-registered MSME is introduced on fresh and incremental loans.
“This is important considering that a lot of the disruptive innovations and job creation comes from the startup ecosystem, which is the need of the hour since unemployment is at a four-decade high of 6.1per cent. Tax exemptions for small businesses, ease the regulatory norms which will eventually encourage entrepreneurship and promote India as a startup hub in alignment with the Startup India initiative by the Indian government,” says Parimal Shah, President International Operations, MK Jokai Group.
Introduction of these initiatives through the new budget is all ready to help and improve the MSME segment present in India. MSMEs could be now more lucrative and profitable than ever, which is why an investment in this sector might turn out to be fruitful for enthusiastic entrepreneurs.
Amol Arora, MD - Shemrock & Shemford Group of Schools says:
“This budget is guided by the mission to strengthen the Education Sector especially the establishment of the ‘National Research Foundation’-which will definitely help in creating the right ecosystem for R&D in the country. And it was great to see the government finally taking notice of industry-relevant skills like AI, IoT, Big Data and reforms in the higher education sector. A humble yet notable announcement was the ‘Study in India’ Programme, which holds the potential to put India on the world map. However, we still need a series of fundamental structural reforms - which I hope will be addressed in the near future."
Beas Dev Ralhan, Co-founder and CEO, Next Education India Pvt. Ltd shares:
“The Union Budget 2019 has proposed significant changes which have the capability to revitalise the education sector. Apart from focusing on improving research and higher education via the National Research Foundation, it has promoted play-based early childhood education and high-quality teacher training via the new National Education Policy. The government has also proposed to increase efforts in skills development of our youth by incorporating new technologies in education such as artificial intelligence, big data, cloud computing, and new learning strategies such as virtual realities and robotics. Furthermore, in an admirable move, the National Sports Education Board for the development of skilled sportsmen is to be set up under “Khelo India” project, so as to promote enthusiasm in sports as an important part of the development of today’s learners.”
Rishu Gandhi, Founder & Head Brand Strategist, Mother Sparsh says:
"We are glad that the government is trying to address the burgeoning problem of pollution in India as a clean environment and surroundings are a must for healthy and strong India of the future. We would have been really happy if the government would have been able to give some benefits or tax relief to environment-conscious startups who are trying to push the eco-friendly products in the market. Government's assistance could make the eco-friendly products go mainstream thus helping to curb the pollution related to plastic waste which is one of the most threatening sources of pollution in India".
Arun Gupta, Founder and CEO, MoMAGIC Technologies shares:
"This is a welcome move by the Indian govt. to lay emphasis on skill training for data science, AI and Big Data etc. as these are skillsets of the future growth engine in the tech industry. Many Indian companies including ours have been focusing on data science to provide cutting edge offerings in the space of digital mobile advertising and having a trained resource pool will drastically cut down the timing for training them.”
Rohit Manglik, CEO, EduGorilla highlights:
"A series of incentives accorded to startups in the Union Budget is a testimony to the government’s intent of fostering an enabling ecosystem to promote entrepreneurship in India. The move to set-up around 80 “livelihood business incubators" and 20 tech business incubators is commendable as it will boost entrepreneurship besides upskilling the workforce to meet demands of industry 4.0. Furthermore, the easing of Angel Tax on Start-ups and the proposal to revamp the Labour Laws will improve the Ease of Doing Business in the Indian economy. The extension of Women SHG Interest Subvention Programme will boost women entrepreneurship.”