Union Budget 2019– MSMEs are the backbone of our Indian economy. Prime Minister of India, Narendra Modi has been focusing on the MSME sector as it is the reason for the economic growth of our country. We can see his motive of developing MSMEs, in his previous year’s 12 key initiatives which have been presented by him to uplift the MSME sector.
As we know recently the GST exemption rate was doubled Rs 40 lakh from Rs. 20 lakh for the sake of small businesses. Even the RBI has been tendered out the loan recast scheme for the credits up to 25 crores to ease the burden of debt-ridden MSMEs.
MSMEs contribute to approximately 95% of the enterprises of India and makeup to about 30% of overall GDP. Approximately 20% of the MSMEs are from rural areas and as a result, they are a major source of the rural workforce.
As per the recent report of RBI, several structural transformations like demonetization and the GST shook up the SME sector, which has been brought cash issues and especially hurdles in exports. But also it will bring positivity in profit based activities of MSMEs after some period. To resolve these issues Government is also releasing several incentives for MSMEs.
In the previous 4 years, Finance Minister Arun Jaitley has been initiated several measures for the benefit of the MSMEs and to resolve cash issues. Budget 2018 perceives an enhanced allocation to MSMEs to Rs 6,552.61 crore, from Rs 6,481.96 crore in the preceding budget.
One of the major challenges had been faced by the SME sector is getting access to the credit. In the budget 2015, Jaitely launched Pradhana Mantri Mudra Yojana to offer loans to SMEs from Rs. 50000 to Rs. 10, lakh for the period of 5 to 7 years. This scheme is intended at offering affordable loans for SMEs and reforming them under standard financial system. While budget 2017 saw a budget allocation of Rs 2.44 lakh crore for Mudra Yojana, in budget 2018, it was provided a fresh portion of Rs. 3 lakh crore.SMEs has found it challenging to build the most technology.
Trade Receivables Discounting System (TReDS) was initiated in the budget 2015, to serve as a web-based platform for facilitating finance to MSMEs through multiple financiers at a competitive rate. In Budget 2018, Jaitley proposed to bring public sector banks and corporations on the TReDS platform and link it with the goods and services tax network (GSTN). This move was expected to bring in more credit and make TReDS more usable and credible.
TReDs was initiated in the budget of 2018, to act as a web-based platform for easing funding to MSMEs through several financiers at an affordable rate.
In Budget 2018, Jaitley proposed to bring open public banks and corporates on the TReDS platform and connects it with the GSTN. This move was required to get more credit and make TReDS progressively usable and solid.
In budget 2017, tax relief was granted to private ventures. The corporate expense for those with a yearly turnover of Rs 50 crore or less was diminished to 25% against 30% in the past budget. In the last budget, this tax relaxation was reached out to the organizations that were recording a turnover of up to Rs 250 crores.
The National Manufacturing Competitiveness Program, which got a designation of Rs 506 crore in 2017-2018 was climbed to Rs 1006 Crore in 2018-2019. The plan is gone for building a more grounded and focused MSME sector.
The Narendra Modi government has likewise begun different leader programs that were predominantly gone for boosting the MSMEs, on the off chance that not uncomplicatedly, in a roundabout way. Activities like Stand-Up India, to empower interest of SC/ST and Women business people and Make in India to advance indigenous enterprises were begun by the government decision.
Development and Entrepreneurship were expanded from Rs 3,016 crore to Rs 3,400 crore. Perceiving the requirement for digitization of the MSME, the Digital India programme saw the allocations multiplying in the most recent budget to account to Rs 3073 crore.