#Budget2019: Here is What the MSMEs Gained
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From farmers to new-age technology-led innovation, the 2019 budget had something to please everyone. Having said, with the general election due in May, the budget did have some significant proposals for the MSME sector.
Acknowledging the efforts of the MSMEs, Finance Minister Piyush Goyal while presenting the interim budget 2019, said that the government has undertaken several effective steps to strengthen the sector.
Here are the some of the key highlights for the MSME sector:
Goyal pointed out that the government has recently launched a scheme to sanction loans up to INR 1 crore in 59 minutes. To further support the MSME sector, Goyal announced,“ GST-registered SME units will get 2 per cent interest rebate on an incremental loan of INR 1 crore. The requirement of sourcing from SMEs by government enterprises has been increased to 25 per cent. Of this, the material to the extent of at least 3 per cent will be sourced from women-owned SMEs.”
Sampad Swain, Co-Founder & CEO, Instamojo thinks the scenario, looks positive for the MSMEs, given the initiatives announced by the government ease in obtaining loans, however access to credit for MSMEs continues to remain the need of the hour.
“The government’s mandates of 25 per cent of goods procurement from SMEs will help the sector scale up, not only in terms of quantity but will also enable wider reach, thus expanding to different markets. This budget has opened doors to a new focus area – women entrepreneurs in the MSME sector. Supply of goods to the government will help women-owned SMEs and MSMEs achieve stability in business, and scale-up further,” he shared.
Additionally, Government e-Marketplace (GeM), where MSMEs have an opportunity to sell their products, have been proposed to extend to all CPSEs or the PSU companies.
Commenting on the above proposal made, Gaurav Gupta, CEO, Adani Capital says “This will spur a new wave of economic development, making way for more capital expenditure by the SMEs, with add-on benefits to other allied industries. This will further aid employment generation and help in the all-inclusive growth of the economy.”
Goyal also announced that business with less than INR 5 crore annual turnovers will be allowed to file quarterly GST Returns.
Sameer Vakil, Co-founder & CEO, GlobalLinker says this will cover nearly 90 per cent of GST filing companies and “will be a huge relief to many SME firms".
The budget also proposed to bring down the corporate tax for firms that reported turnover up to INR 250 crore from 30 per cent to 25 per cent.
Akshat Saxena, co-founder, ePayLater - Digital Payment Solution says, “This move is expected to further reduce the tax burden on MSMEs and boost the growth of these companies.”
To conclude, with the government's measure to support SMEs through easy of taxation and increasing uptake, the sector is likely to see upwards growth and might look at some job creation in the coming time.