What’s in the Budget for MSMEs? Here’s a quick guide
Feb 1, 2023
Budget 2023 lays down a slew of measures to boost growth and provide support to the entire MSME community. Here are the key takeaways.
Finance Minister Nirmala Sitharaman, in the budget, had a slew of announcements that would impact the MSME sector. Announcements that touched on sectors such as fisheries, agriculture and infrastructure would all go on to have a positive impact on millions of small businesses. But these are the broad announcements the FM had for MSMEs:
Credit Guarantee for MSMEs
Last year, the FM had proposed revamping of the credit guarantee scheme for MSMEs. On Wednesday, Sitharaman said the revamped scheme would take effect from April 1, 2023, through the infusion of Rs 9,000 crore in the corpus. This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit will be reduced by about 1%.
PM VIshwakarma KAushal Samman (PM VIKAS)
For centuries, traditional artisans and craftspeople, who work with their hands using tools, have brought fame to India through their creations. The FM said the art and handicraft created by them represents the true spirit of atmanirbhar Bharat. “For the first time, a package of assistance for them has been conceptualised. The new scheme will enable them to improve the quality, scale and reach of their products, integrating them with the MSME value chain. The components of the scheme will include not only financial support, but also access to advanced skill training, knowledge of modern digital techniques and efficient green technologies, brand promotion, linkage with local and global markets, digital payments and social security,” Sitharaman said in the budget. This would greatly benefit the Scheduled Castes, Scheduled Tribes, other backward classes, women and people belonging to the weaker sections.
Vivad se Vishwas I – Relief for MSMEs
In cases MSMEs had failed to execute contracts during the Covid period, 95% of the forfeited amount relating to the bid or performance security would be returned to them by government and government undertakings, according to the budget. This should provide relief to MSMEs that are struggling to make ends meet because of economic disruptions.
An Entity DigiLocker will be set up for use by MSMEs, large business and charitable trusts, according to the budget. This will help these companies store documents online securely so that these can be, whenever needed, shared with various authorities, regulators, banks and other business entities easily.
MSMEs are the growth engines of our economy. Till now, micro enterprises with a turnover of up to Rs 2 crore and certain professionals with a turnover of up to Rs 50 lakh could avail the benefit of presumptive taxation. The FM, this year, enhanced the limits to Rs 3 crore and Rs 75 lakh, respectively, for the taxpayers whose cash receipts are no more than 5% of something. Moreover, to support MSMEs to get payments on time, the FM has also proposed to allow deduction for expenditure incurred on payments made to them only when the payment is actually made.
Skill India Digital Platform
The digital ecosystem for skilling will be further expanded with the launch of a unified Skill India Digital platform for:
· enabling demand-based formal skilling
· linking with employers, including MSMEs
· facilitating access to entrepreneurship schemes.
[The Economic Times]