Union Budget Proposes Strengthening MSMEs to Boost Make in India
Author: Desk July 6, 2019
“Make in India”, with particular emphasis on Micro, Small and Medium Enterprises, is one of the major focus areas of the Union Budget this year. Delivering her budget speech in Parliament today, Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman announced various proposals aimed at strengthening the sector.
For ease of access to credit for MSMEs, Government has introduced scheme for providing of loans upto Rs. 1 crore within 59 minutes through a dedicated online portal. Under the Interest Subvention Scheme, Rs. 350 crore has been allocated for FY 2019-20 for 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans.
The Finance Minister also announced the Government’s intent to create a payment platform for MSMEs to enable filing of bills and payment on the platform itself to eliminate delays in government payments.
The Finance Minister further informed that the Government has decided to extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs.1.5 crore under a new scheme named Pradhan Mantri Karam Yogi Maandhan Scheme. Enrolment into the Scheme will be kept simple requiring only Aadhaar and a bank account and rest will be on self-declaration.
The Finance Minister also announced that under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI) 100 new clusters will be set up during 2019-20 enabling 50,000 artisans to join the economic value chain. SFURTI aims to set up Common Facility Centres (CFCs) to facilitate cluster based development to make traditional industries more productive, profitable and capable for generating sustained employment opportunities. Focused sectors are Bamboo, Honey and Khadi clusters.
The Minister further announced that the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) would be consolidated for setting up of 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs)in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors.
The Budget says that the Government will support private entrepreneurships in driving value-addition to farmers’ produce from the field and for those from allied activities. Dairying through cooperatives will be encouraged by creating infrastructure for cattle feed manufacturing, mild procurement, processing and marketing.
The Union Budget has also made proposals under indirect taxes to promote Make in India, that may also benefit the MSME sector. For example, to provide domestic industry a level playing field, basic Customs Duty is being increased on items such as cashew kernels, PVC, Vinyl flooring, tiles, metal fitting, mountings for furniture, auto parts, certain kind of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders etc. Exemptions from Custom Duty on certain electronic items which are now being manufactured in India are being withdrawn. End use based exemptions on palm stearin, fatty oils, are being withdrawn. Exemptions to various kind of papers are being withdrawn.