#Govt. Policies for MSMEs | Explore Tumblr Posts and Blogs

openideas2open · 2 years

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Finance Minister Nirmala Sitharaman tabled the Union Budget 2023-2024. Like previous Union Budgets, this fiscal year focuses on Inclusive Development (financial inclusion of small Businesses and support ease of doing business), promoting Public-Private Partnerships, Skilling (teaching-upskill), and setting off medium to long-term national development programs. In the previous blog, we set specific expectations out of the Union Budget for startups and businesses. Here is a roundup of Union Budget 2023 highlights.

Key Union Budget 2023 Highlights

The ease of doing business just got easier:

More than 39,000 compliances were reduced, and over 3,400 legal provisions were decriminalized. Govt introduced the Jan Vishwas Bill to amend 42 central acts to further trust-based governance at all levels. Decriminalizing offenses in this context means a specific number of minor economic offenses which were earlier punishable with imprisonment will now be a penalty that a governing body would levy with revised fines and penalties.

The National Data Policy will allow access to anonymous data to create risk-based profiles to further the creation of adaptive KYC for Digital India. Government bodies will leverage Business PAN as the key identifier for assessing and accessing company data. It will reduce the complexity of doing business as it will reduce the usage of over 13 different business IDs, such as EPFO, ESIC, GSTN, TIN, TAN, and PAN, used to apply for various government approvals.

MSMEs Unbound:

Union budget 2023 focused mainly on the Micro, Small, and Medium Enterprises (MSMEs) sector.

FM Nirmala Sitharaman declared the Vivad Se Vishwas scheme for failing MSMEs. MSMEs will receive 95% of the performance security from the government under this scheme in cases of failure to execute contracts.

Another big step is to enable timely payments to MSMEs. A deduction for payments made to MSMEs will only be allowed when it is paid off.

Extension of ECLGS To focus on the hospitality sector, the Finance Minister announced the extension of ECLGS up to March 2023. The Emergency Credit Line Guarantee Scheme (ECLGS) was launched amid the Covid-19 pandemic to help MSMEs cope with pandemic losses and was extended up to March 31, 2022. Considering the following aspects, the ECLGS will be extended up to March 2023, and its guarantee cover will be expanded by Rs 50,000 crore to a total surface of Rs 5 lakh crore.

Govt. will Revamp Credit Guarantee Trust for small micro-enterprises scheme (CGTMSE) with an additional infusion of 9000 Cr. It will allow for two lakh crores of rupees in collateral-free guaranteed credit. Furthermore, credit costs will be reduced by about 1%.

For presumptive taxation of small businesses and professionals:

The turnover limit for small businesses was expanded to Rs 3 crore from earlier Rs 2 crore,

For certain professionals, it was broadened to Rs 75 lakh from earlier Rs 50 lakh.

Presumptive taxation can only be used when the value of cash receipts is at most 5 percent of the total value of the receipts. Small businesses and professionals need not maintain their books of account and get their accounts audited, which relieves tedious tax filing exercises.

Reduction of customs duty on specific items and customs duty exemption on iron and steel scrap will contribute to the growth of MSMEs.

The government extends customs duty exemption to capital goods and machinery imports used to manufacture lithium-ion cells for EV batteries. This cost drop will aid electric vehicle growth and help businesses produce EVs at a lower manufacturing cost.

The government extended the scope of the current DigiLocker to assist innovation in the fintech industry with Entity DigiLocker. Soon, Entity DigiLocker will allow MSMEs, companies, and charitable trusts to not only store but also share documents securely with authorities, regulators, banks, and other business entities.

Extended Tax holidays and a little more for StartUps:

The Centre announced tax holidays along with many regulatory changes for Startups. They will be listed below:

FM Sitharaman extended the Tax Holiday Scheme for startups till March 31, 2024, which means that startups incorporated till the latest date next year can avail of tax benefits. The tax holiday scheme was earlier available for startups incorporated till March 31, 2023. Other Tax benefits are that the eligible start-ups incorporated before 1 April 2024 also stand to enjoy these tax measures, which are deferral of ESOP taxation under Section 192(1C), relaxation on carry-forward, and set-off of losses under Section 79, angel tax exemption.

The Budget 2023 provided relief to startups by giving the benefit of taking forward losses on a change of shareholding of startups from seven years to ten years. The condition of continuity of a minimum of 51% shareholding to offset carried-forward losses is relaxed for eligible startups if all company shareholders continue to hold those shares.

Govt. is widening the scope of Angel Tax to include non-resident investors. Levy of angel tax in the hands of private companies where consideration for issue of shares is higher than fair market value.

As per the said section, the scope of this angel taxation specifically included only residents thus far.

However, the budget proposes to omit ‘resident’ from the said section with effect from 01 April 2024, thereby widening the ambit of taxation in the hands of startups to include investment received from non-residents.

Despite rapid modernization, India is deeply an agriculture-based economy. However, there are still a lot of relevant pain points within the sector that need to be solved to allow the industry to flourish. To facilitate this:

The government has created an Agriculture Accelerator Fund that will encourage new solutions and startups within the space and create a platform to promote information sharing amongst farmers.

Because of increased emphasis on digital payments, Govt. proposed the digitalization of 63,000 primary agricultural credit societies through an investment of INR 2516 crores through the Digital Agriculture Infrastructure Scheme.

Disease infestation has been a dire problem affecting 35% of total crop production. The Atma Nirbhar Clean Plant Program, with a budget allocation of Rs 2200 crore, will offer farmers access to disease-free planting material and other facilities.

The government has taken several steps to promote startups in the country. Under the Startup India initiative, the Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS), and Credit Guarantee Scheme for Startups (CGSS) are implemented to provide capital at various stages of the business cycle of a startup.

Green power was at the forefront of the 2023 Union Budget. The government is particularly keen on promoting solutions and encouraging people to avoid using non-green energy solutions. Govt. announced numerous policies to promote less disastrous alternatives – The National Green Hydrogen Mission with an allocation of Rs. 19,700 crores and 35,000 Cr. for the energy transition.

There have been few technological enhancements as pivotal as AI. Recognizing the sheer value that greater integration of AI can add to the economy, the government will create a National Data Governance Policy that will allow access to anonymized data and set up three AI research centers.

Indirect Taxes and Custom Duties were relaxed

Indirect taxes like GST and Customs form a significant part of the government’s revenue and deeply impact daily lives and manufacturing costs. Here below are the changes announced in the Union Budget 2023:

Goods and Services Tax: ITC will not be available regarding goods or services used for activities relating to corporate social responsibility.

Customs duty: As part of rate rationalization of the customs duty rate structure, BCD, SWS, and AIDC rates on several goods, other than textile and agriculture, will be reduced to 13% from 21%. Details are awaited for the list of items covered under the 13% slab.

Certain items like polished diamonds, chemicals needed for petroleum products, camera lenses for cellular mobile phones, and steel scrap have been reduced, and eventually, these items will get cheaper.

Other things that will become cheaper include parts of open cells of TV panels, Denatured ethyl alcohol used in the chemical industry, and compounded rubber.

FM extended customs duty on camera lenses and their inputs or parts for use in the manufacture of the cellular mobile phone camera module reduced to zero and concessional duty on lithium-ion cells for batteries for another year.

Increase in CAPEX to boost Indian Infra:

Infrastructure is the backbone of any economy. To ensure that India is as robust as possible, the government has increased the capital expenditure allocation to Rs. 10 lakh crore, a massive 33% increase. It will significantly benefit logistics-heavy businesses and sectors in India and make transportation less hassle for Indian entrepreneurs. Reduction in logistics costs will give a much-needed boost to commerce in Tier 2 and 3 cities.

Stepping into the future

Looking at the Union Budget 2023 highlights, the government has pushed financial inclusion and digitalization of finances across industries. In this Union Budget, the FM extended financial aid to businesses, digitalized the agriculture industry, relaxed many business regulations to attract FDI, and boosted capital expenditure to support business growth. In summary, the budget is aspirational and grounding, with a plan for sustainable development and making India an economic superpower.

#finance #economy #startup #fintech #entrepreneur #union budget

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tsasocial · 2 years

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Indian textile and apparel market likely to reach US$ 250 billion by 2025-26

Adopting good regulatory practices, increased focus of quality, compliance issues with enhanced investments and continuous engagement with government key to achieve target: Ajit Chavan, Secretary Textile Committee, Ministry of Textiles, GoI

FICCI-Wazir Advisors today released a knowledge report 'Building a Roadmap for US$ 250 Billion Sustainable Textile Industry' during the FICCI TAG 2022 Annual Textile Conference.

The report highlights the key global trends, market scenarios, and opportunities for India in the textile and apparel market. It further elaborates on the key initiatives that India will need to achieve the target of US$ 250 billion by 2025-26 and build a sustainable industry going forward.

Global apparel consumption in 2021 is estimated to be around US$ 1.5 trillion and it is estimated to reach US$ 2 trillion by 2025. Global textile and apparel trade is around US$869 bn and expected to grow at 3.5% CAGR to reach US$ 1000 bn by 2025-26.

The report further states that the Indian textile & apparel market is estimated at US$ 153 bn in 2021, with the domestic market constituting US$ 110 bn and exports contributing US$ 43 bn. The Indian textile and apparel market has the potential to reach US$ 250 bn by 2025-26.

The report highlighted key global trends impacting the textile and apparel industry, which included a High focus on sustainability and circular fashion, the 'China+1' strategy of global brands providing an opportunity for countries like India to increase their export share, Increasing the need for digitalization across the fashion supply chain and Growing consumption of synthetic based textile and apparel.

The report suggested that to achieve the target of a US$ 250 billion market and build a sustainable textile industry going forward, Indian Industry needs to focus on leveraging government support schemes like PLI, PM MITRA, Export incentives, etc. to invest in new products, build the scale of operations, and improve competitiveness. The industry should also align with global buyer needs of sustainability, value chain traceability, and providing end-to-end services.

The report further suggested that Industry should also focus on automation and digitalization to improve processes and efficiency levels; bring a Strong focus on people and skill development, start leveraging FTAs to tap new markets; develop capabilities and build capacities in synthetic textiles and technical textiles and adopt global best practices for manufacturing excellence. The government should bring additional support to the existing textile clusters which will help build capabilities and allow MSMEs to compete globally, highlights the FICCI-Wazir Advisors report.

While addressing at 'FICCI TAG 2022', Mr. Ajit Chavan, Secretary and CEO, of Textile Committee, Govt of India said that adopting good regulatory practices, sustainable chemistry, increased focus of quality and compliance issues, coupled with enhanced investments and continuous dialogue and engagement with the government are key mantras for achieving 250 billion USD target of Sustainable Textiles market in India by 2025-26.

He also suggested that the state government's Textile Policy should include parameters of Quality and Compliance beyond incentives.

Ms. Lubeina Shahpurwala, Member, FICCI and Co-Founder, Mustang Enterprises, said, "Innovation and efficiency will be the key pillars for Indian textile businesses to further enhance their footprint in global textile & apparel markets. Identify global best practices in the sector and encouraging adoption to improve efficiency and competitiveness."

Mr. Rahul Mehta, Chief Mentor, CMAI, said that India can achieve the US$ 250 billion target easily by focusing on the Indian domestic textile and apparel industry and increasing the per capita consumption of consumers. He also stressed on the aspect of sustainability should be incorporated in the Textile policy.

Mr. Prashant Agarwal, Co-founder of Wazir advisors said that the Industry in confident of achieving the US$ 250 billion target. The key is to focus of creating own brand positioning, focus on investments and training. It will lead to investment by big players and MSME, as both will co-exist.

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#Indian textile

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biztellersng · 2 years

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By John Danjuma If elected in 2023, Labour Party would run a government where the rich and the poor would be equitably and fairly represented, the presidential candidate of the party, Mr Peter Obi, has disclosed. A statement from the Obi/Datti campaign office said Obi made the remarks at the weekend during the 95th anniversary celebration of Queen’s College organised by Lagos Old Girls Association. He explained further that his administration will ensure Citizens’ interests will take pre-eminence over political interests so that the existing trust gap between the government and the governed will be reduced to the barest minimum. Read also>>>Crude Oil Theft: Why Peter Obi’s Allegations Against Nigerian Govt May Be True On female representations in his government he said just like when he was governor of Anambra State, his administration achieved close to a 60-40 gender balance in appointive and elective positions his Presidency if elected “intend to progressively aim for between 35-40%, with aggressive gender mainstreaming action plan and rigid benchmarks” According to him, education is central to his government policy thrust saying he will pursue a Marshal plan-type programme on education that incorporates compulsory technical and vocational skills, sports, entrepreneurship, programming, and digital skills from primary to the secondary level. ‘Inevitably, we will improve access to finance, MSMEs, youths and women, to significantly reduce unemployment and insecurity. According to the former Anambra state Governor “We will introduce a mandatory “No Child left Behind” educational policy, mindful that Nigeria’s inadequate investment in the social sectors – health, education, and housing has resulted in the current dismal social and demographic trends reflected in low life expectancy, high maternal mortality rate, large number of out-of- school children, huge unmet housing needs as well high youth unemployment. “Our government shall prioritize education to serve the following functions: technical and industry relevance; alignment with local comparative advantages and factor endowments; modern skills proficiency, critical thinking, ethical citizenship values, global competitiveness, and talent export. His plans also he said will be to “prioritize a structured approach to developing the digital skills of our young population to give them the competitive advantage to receive offshore jobs in the new gig economy, while also improving the efficiency and productivity level of our economy” “The Obi-Datti administration, when elected President of Nigeria, will sustain national development. Our governance principles, priority projects and programmes shall be anchored on the 17 Sustainable Development Goals (SDGs). Obi noted that Experience shows that inclusiveness is an essential element in effective public policy making pointing out that he intends to stop the under representation of critical components of the society in decision making such as women, youth, and the vulnerable in our midsts. According to the LP presidential candidate, if elected, “From its inception, encourage investment in infrastructure, energy, transport, irrigation, and telecoms and education with gender mainstreaming and social inclusion in education, enterprise and politics will always be a priority. Obi also expressed his Commitment to the well being of the Girl Child and Women pointing out that this will be fully reflected in his broad and gender-specific policies. He also plans to reset and reboot Nigeria in all ramifications –leadership and governance, security of life and properties, economic and political freedom and this according to the candidate “will entail the promotion of intangible assets that underpin democracy; namely, good governance, rule of law, security of lives and properties and robust institutions. There will be visible and measurable indices of governance the people can experience.

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technuter · 2 years

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Indian Government to set up 100 5G labs in the country

After the historic launch of 5G services in India, Union Minister for Communications, Electronics & Information Technology Ashwini Vaishnaw said the Indian Government is going to set up 100 5G labs across the country. He was speaking on Day 2 of the 6th edition of Asia's largest technology exhibition India Mobile Congress (IMC 2022) at Pragati Maidan in Delhi. The Minister also invited comments for the draft of the Indian Telecommunication Bill, 2022. He added Government is working significantly towards simplifying the license regime for all telecom players and urged the telecom industry to convert a minimum 12 of these labs into incubators to train students, promote innovation, research and experiment. The 2nd day of the ongoing edition was also graced by the presence of Union Commerce and Industry Minister Piyush Goyal who visited the exhibition and lauded efforts of researchers, private organisations, startups and others. Union Minister for Communications, Electronics & Information Technology Ashwini Vaishnaw said," We are going to set up 100 5G labs across the country. I request the telecom industry to come together and convert at least 12 of these 100 labs into telecom incubators to train students and do experiments.The Govt. is working significantly towards simplifying the license regime for all telecom players. I am really happy to see the energy of startups and MSMEs who are going to rural areas to benefit people." During his visit to the exhibition later in the day,Union Commerce and Industry Minister Piyush Goyal said," The launch of 5G is going to be a defining moment for not only India but for the world. A large economy like India which has talent is emerging from the shadows to take a leadership role. We are now indigenously designing, developing and manufacturing goods and showing the world the scale and speed with which we will take 5G through the length and breadth of India. Some of the products that I saw displayed here, at one point of time it was assumed that they had to be imported. I must compliment all the researchers, private organisations for their innovative work. I must compliment the startups for the way in which they are finding very practical solutions to the day to day problems of business and people's living." The India Mobile Congress 2022 is hosting engaging and thought-provoking sessions with the presence of policy makers, thought leaders, industry experts, academicians and students. The key highlights of Day 2 were sessions including 'Automated Networks for 5G workloads', 'Startups: From ideas to executions', Security: A business priority in the connected world,' '5G test beds: From lab to the field,' and many others. IMC 2022 is being jointly organized by the Department of Telecommunications and Cellular Operators Association of India (COAI). The endeavors of IMC perfectly fall in line with the vision of Digital India and promoting Made-in-India technology to address the challenges in areas of commerce, healthcare, education, communication and financial inclusion. It seeks to highlight how 5G technology can improve quality and access to healthcare facilities by ensuring medical aid in remote areas, tele-health, specialized healthcare at primary care centers and connecting them to specialty hospitals. Moreover, in education, 5G is important for connecting schools in rural areas, providing remote education, offering AI-ML based deep learning, and digitalization of curriculum. It can empower the agriculture sector and farmers with real time data transfer, monitoring, utility services, automation and drone-based utilities. Since its inception, IMC has been actively promoting India's strength and position as a global hub for manufacturing technology products. It is further highlighting the role of startups, small-scale industries in the new digital universe to deliver best in class service, equipment, and applications. PM Modi lauded the efforts of IMC for bringing the digital ecosystem together and providing a great platform for dialogues and endeavors on digitalization, technology, nation building, industrial revolution and taking government services to doorsteps. Read the full article

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especiaassociates · 5 years

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Here are the Budget 2020 Updates: • Hiking foreign investor access to government securities positive for yields: CRISIL • Govt to transfer balances into GST compensation fund for 2016-18 • Govt plans to raise fund via LIC IPO: FM • GIFT City to set up international bullion exchange • Rs 22,000 cr of Rs 103 lakh cr already provided for infrastructure: FM • Govt to enhance partial credit guarantee scheme for NBFCs • FPI Limit in corporate bonds to be raised to 15% from 9% • FM says recent CPSE Debt ETF has been a big success • New debt ETF to be launched consisting mostly of G-Secs: FM • NRIs to be allowed to invest in certain categories of G-Sec • Govt asked RBI to mull extending MSME recast window by 1 more year, says FM Sitharaman. • FY21 fiscal deficit target pegged at 3.5% of GDP: Bloomberg • FY20 fiscal deficit seen at 3.8% of GDP: Bloomberg • Centre to allow NBFCs to extend invoice financing to MSMEs • Govt to sell stake in IDBI Bank to private investors • Govt to amend banking regulation act to strengthen co-operative banks • NBFC eligibility for SARFAESI Act reduced to Rs 100 cr from Rs 500 cr AUM • Deposit insurance coverage increased to Rs 5 lakh from Rs 1 lakh: FM • PSBs will be encouraged to approach capital markets for fundraising, says FM Sitharaman • Govt has infused Rs 3.5 lakh crore in PSU banks over last few years • Govt to allocate Rs 100 cr for hosting the G20 Summit In 2022 • Govt to bring national policy on official statistics • Centre to launch a common entrance test for recruitment of non-gazetted posts • Govt proposes to amend the Companies Act to bring criminal liability in certain areas • FM says Govt to launch new export credit scheme called 'NIRVIK' • Tax harassment cannot be tolerated: FM • To enshrine a taxpayer charter in the statute: FM

#Budget 2020 Updates on Banking & Finance Sector

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drujjwalpatni · 5 years

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मोदी जी की योजनाओं से अपना बिज़नेस कैसे बढ़ाएं, कौन से नए व्यापार करें | Dr Ujjwal Patni

In this video Dr. Ujjwal Patni addresses the issues that the Business Owners Entrepreneurs Tax Experts and Finance Analysts will be facing after this Sweep Victory of MODI JI. Dr. Patni brings light on the Policies that will be beneficial for Business Men in next 5 years. #BusinessCoach Dr. Ujjwal Patni assures the SME & MSME owners that Prime Minister Modi Ji & Mr. Amit Shah has the right amount of willfulness to bring about the Changes for the Development of Indian Economy. #BJPManifesto – 50 k by 2024 #govplan Dr. Patni talks about #Business #Alignment of respective #Trade as per #GOVT’s Policy. He has suggestions and #BusinessSolutions for all the persons involved in Business. For #StartUps : Rs. 20,000 Crores seed #Fund. 100 #Innovation #Zone For #NorthEast: #Financial & #Technological #Assistance for #Entrepreneurs For #Infrastructure: Development #Initiatives such as : #Gas #Grid, #Water Grid, #Regional #Airports, #NHA #Amenities These are just a few points that Dr. Patni has covered, for more #Information kindly watch this video and do comment, like and subscribe #UjjwalPatni #youtube channel.

#narendra modi #shapath grahan #bjp manifesto #bharatiya janata party

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msmehelpline123 · 2 years

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Chamber of Indian Micro Small & Medium Enterprises ( CIMSME ) is an apex chamber of MSMEs. CIMSME represents the interest and issues of MSMEs to the Government and various Regulators. To Download MSME Ki Pathshala App Click on This Link -

Click Here-: MSME KI PATHSHALA

CIMSME is actively participating in Policy making and many recommendations of CIMSME have been accepted by Government of India, be it for the Union Budget or any other policy issue related to MSME. The real strength of CIMSME is its members across the country. To increase the visibility of MSMEs and strengthening them, we invite MSMEs to be proud members of CIMSME. Some of the benefits of membership of CIMSME are as under:- i. Opportunity to Interact, liaise & network with peer member constituents, Institutions, Banks, Central and State Government Officials, Diplomats, etc. in various meetings of the Chamber, ii. Opportunity to be part of delegations to interact with the Government on policy issues and to redress problems of members both at the Central & State Govt. levels, iii. Be part of a learning environment for sharing problems and finding possible solutions through various knowledge sharing events of the Chamber, iv. Receive regular updates on Government Policies, Notifications, etc. v. Participate in Expert Committees set up by the Chamber and place their views & suggestions therein, vi. Participate in Seminars, Conferences, Meetings, Delegations, Training programs at a discounted fee or free of cost, vii. Enhancing the managerial abilities by listening to eminent Personalities, viii. Opportunity of getting timely funding from various banks/ Financial Institutions through Banker-Borrower Meets. ix. Avail CIMSME expertise in helping realizing long overdue payments from big buyers/ Large Corporates/ PSUs. CIMSME introduces online membership to deliver the best services to the MSME entrepreneurs.

#mudra loan #mudra scheme #mudra yojana #mudra #loan #msme loan #business loan #personal loan #Youtube

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openideas2open · 2 years

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Union Budget 2023 is coming soon – it is that time of the year again when businesses and commoners listen keenly to every word of the Finance Minister on how the Govt. will allocate funds and amend rules across various sectors. The Finance Minister will also be cognizant of the low fiscal growth in the last two years due to the pandemic and complications arising from the Russo-Ukraine war in mind.

In November 2022, the Finance Minister met leading economists and stalwarts from across industries to discuss how India can maintain healthy growth in the impending policy-induced global recession. India braved the last two years of the downturn and maintained a healthy growth rate by providing fiscal incentives and relaxation to businesses and, to some extent, to individuals. Before diving deep into the outcome of the discussion, we will take a brief look at Union Budget 2022, which will help us decipher and set expectations for the Union Budget 2023.

Union Budget 2022 Highlights for MSMEs and StartUps

The Union Budget 2022 saw a renewed focus on providing financial support and promoting the growth of SMEs (Small Businesses) and Startups so that they can weather the turbulent times. Read this blog on Union Budget 2022 for more details; however, you can find some key highlights below in a nutshell:

Union Budget 2022 for MSMEs: The Udyam, NCS, e-Shram, and ASEEM portals were interlinked, and the government rolled out various credit guarantee schemes to support MSMEs.

Union Budget 2022 for StartUps: The Govt. prompted selective startups to facilitate ‘Drone Shakti’ and defense R&D for startups, industry, and academia. A fund was raised under the co-investment model to finance agriculture startups and rural enterprises.

Union Budget 2022, Tax Relaxations for StartUps: Eligible startups got tax incentives for three consecutive years. Govt. gave a concessional tax regime of 15% to newly incorporated domestic manufacturing companies. Startups got an extension of customs duty exemption by another year.

The Union Budget showcased the heightened focus of the Govt. on sustaining growth and helping MSMEs brave and sail through the stormy waves of turmoil and uncertainty during the pandemic and war.

As Union Budget 2023 came closer, the Finance Minister, Nirmala Sitharaman, called for industry experts and economists to discuss how the nation can sustain growth during a policy-induced recession. A policy-induced recession is a global recession due to monetary and fiscal policy moves in advanced economies to curb rising inflation and low GDP growth rate due to pandemic risk that pushes the world towards global recession. Below are some excerpts from the discussion.

Union Budget 2023: Excerpts from the Prebudget discussion between the Finance Minister and Experts

As mentioned at the blog’s beginning, November 2022 saw the Finance Minister’s prebudget meeting with industry leaders and renowned economists of the nation. The critical point of discussion was providing incentives to businesses to sustain financial growth during an economic slowdown. There were eight meetings with 110 invitees.

In these meetings, the experts offered various suggestions and implored the ministry to continue with selective spending and incentivize specific industries to spur growth. They recommended the Govt. to shift focus to the following:

Create various mechanisms for green certification to help MSMEs

Schemes for improving domestic supply chains

Reduction of taxes on electric vehicles (EVs), the introduction of EV policy, and measures to promote India as a hub for green hydrogen,

Cover unorganized workers under the ESIC scheme.

Based on the above extracts from the meeting and taking deep dive into Union Budget 2022, we can have a fair idea of what to expect from the Union Budget.

What can MSMEs expect from Union Budget 2023?

95% of businesses in India are of micro-scale with limited access to funds given the stringent banking regulations. Simplifying the rules and tax relaxations should be the government’s primary focus. Gradually, improving the ease of doing business can provide a great impetus to growth.

Incorporating the following initiatives in the Union Budget 2023 can be very reassuring for businesses. They are as follows:

Extension of the ECLGS scheme: The Emergency Credit Line Guarantee Scheme (ECLGS) brought much-needed relief to credit-starved MSMEs and enabled them to brave through the economic slowdown during the pandemic, subsequent lockdowns, and supply chain crisis due to lockdown of international borders and war. The ECLGS scheme saw reiterations and extensions from its initial launch in May 2020 and is scheduled to expire in March 2023 unless the government provides an extension.

Expansion of the PLI scheme: The Product-Linked Incentive (PLI) can diversify Indian exports further for the better. The current PLI scheme limits itself to large companies and corporates in specific sectors. While these incentives have boosted domestic manufacturing and created more jobs, Budget 2023 may extend the PLI schemes to MSMEs and future industries to boost exports further.

Offering credit at affordable rates: The Russo-Ukraine war has disrupted supply chains that adversely impacted the export sector. It is one of the main sectors that helped revive India’s economy last year and has experienced 37% year-on-year (YoY) growth. Exporters seek credit at affordable rates that promote increased cross-border trade.

Encourage cash flow-based lending: Launching initiatives such as Account Aggregator (AA) and Open Credit Enablement Network (OCEN) dramatically relieved the MSME sector. We can expect supportive measures in democratizing credit and accelerating financial inclusion from Union Budget 2023.

Restructuring of existing MSME loans: MSMEs suffer from a cash crunch and are now requesting to extend the moratorium of existing loans from one year to three years to repay the loans.

Loans to MSMEs be classified as NPAs after 180 days of non-payment: MSMEs face interruptions in the flow of funds owing to delayed payments from buyers. They are requesting the government to consider loans as Non-Performing Assets (NPAs) only after 180 days of non-payment instead of 90 days.

Boost Manufacturing Sector: Government is more likely to encourage the Make in India campaign by laying the bricks for the right enabling framework to build an entire ecosystem of policymakers – from local policymakers to state and central levels. The sectors the government is looking to focus on are manufacturing, capital goods, defense, sustainability, railways, and public sector banks already seeing new investments. We expect these sectors to continue to be in the spotlight.

What can Startups expect from Union Budget 2023?

Currently, India is home to 108 unicorn startups, making it the third largest ecosystem in the world, and by 2025 this number is estimated to reach 250. These startups create millions of job opportunities for the country’s youth and contribute significantly to the national economy, which means that they have high expectations from the 2023 budget making it easier and more lucrative for them to go about their business. Let’s look at some of the major things that startups expect from Union Budget 2023.

Simplified compliance

One of the main things that startups expect is an increase in the ease of doing business, at least insofar as government regulations and compliance requirements are concerned. Simplification in the tax regime and the introduction of specific policies that help startups navigate the process of setting up and running a business with minimum hassles are expected this year.

Tax benefits for early-stage startups

In the early stages, startups need support from the government to come out successfully at the other end of the growth curve. One of the ways in which this can happen is through the government providing tax benefits to startups working out of shared office spaces, also known as co-working spaces. Programs such as REITs (Real Estate Investment Trusts) can play an important role in this, and if the tax burden on real estate companies is reduced, startups will have to spend less on infrastructure, enabling better cash flow.

Focusing on specific sectors Industries like Fintech and EdTech have given some of India’s most successful startups in the last couple of years. Now, the startups in these particular sectors expect the government to form a framework that allows them to interact and collaborate with government agencies. Such collaborations will lead credibility to the startups, bring them within necessary regulatory structures, and allow them to a appeal to wider customer segment.

Conclusion

Budget 2023 is likely to focus on capital expenditure as a growth driver and give an impetus to manufacturing. The finance minister will try to boost capital expenditure from the current 2.9% GDP to nearly 3.5%. Startups, small businesses, and MSMEs can expect better credit access. Promoting growth and generating more employment may remain the key focus. Tax relaxation and regulations that improve the ease of doing business will likely hold priority.

#Union Budget #Startup #Small Business #Business #Economy #fintech #finance

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thenetionalnews · 2 years

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Govt making necessary policy changes to encourage MSME sector: PM Modi

Prime Minister Narendra Modi on Thursday assured the MSME sector that the center is ready to make necessary policy changes to encourage small entrepreneurs as they are playing a key role in the ‘AatmaNirbhar Bharat’ (self-reliant) initiative of the government. Addressing the ‘Udyami Bharat’ programme, the Prime Minister exhorted small entrepreneurs to register themselves on the GEM portal for…

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todaynewsguru · 2 years

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Govt making necessary policy changes to encourage MSME sector: PM Modi

Prime Minister Narendra Modi on Thursday assured the MSME sector that the centre is ready to make necessary policy changes to encourage small entrepreneurs as they are playing a key role in the ‘AatmaNirbhar Bharat’ (self-reliant) initiative of the government. Addressing the ‘Udyami Bharat’ programme, the Prime Minister exhorted small entrepreneurs to register themselves on the GEM portal for…

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omotec-22 · 3 years

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Our CEO & Co-Founder, Shekhar Avinash Jain, was quoted in BW Business world amongst all EdTech experts

Here are his #insights: "The Prime Minister has asked the nation to be #atmanirbhar. With this he has sowed the 3 big game changers for India – (a) National Education Policy (b) Startup Culture (c) India to be the new manufacturing destination for CHIP manufacturing For all the above, the common underlining theme is that the students of today and tomorrow will need to have more technology focused education by aiding todays education with new age technology subjects of Robotics, Electronics, Coding Languages along with Artificial Intelligence and Machine learning. Of the 1.4 million schools in India, 55% of them are run by the government which caters to at least 60% of the 250 million K12 students. To offer these programs, the education sector would request the following considerations : 1. Reduce the GST on education sector services specifically for Robotics & Coding from the existing 18% to 5% for the next 3 years for education to be made accessible to larger learning population. This would mean a huge impetus by the government by making new age technology more accessible to govt schools. 2. Reduce the GST on electronic components used for making PCBs / Electronics Kits/ Prototyping for education purposes from the existing 18% to 5% 3. MSME’s in the education sector who have been hit by the pandemic as schools have been closed be given a tax holiday for at least 2 years for them to recover their costs and also reduce their prices for educational services being provided by these MSME’s to schools. 4. To provide tax holidays for 3 years to institutes teaching Research and Innovation to K12 students through published Papers / Prototyping / Filing Patents for students."

#bw #businessworld #nationaleducationpolicy #educationpolicy #robotics #coding #startup #ceo #technology #innovation

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