Union budget 2022- 2023 – MSME KINSHIP

Union budget 2022- 2023 – MSME KINSHIP

Finance Minister Nirmala Sitharaman announced the budget for 2022-23 on 1st February. Budget 2022-23 provides ease of doing business for start-ups and small and medium-sized enterprises (MSMEs).

The Ministry of Micro, Small, and Medium Enterprises (MSME) contributes significantly to the country’s economic and social development by promoting entrepreneurship and creating employment opportunities. The Union Budget 2022-23 emphasizes the MSME sector. It is an important sector, accounting for about 45% of the country’s total manufacturing output, 40% of exports, and almost 30% of GDP.

India’s MSME sector provides 6.3 million units employing more than 11 million people, accounting for more than 28% of India’s GDP.  ACCORDING TO EXPERTS, the MSME sector is considered the biggest winner in the union’s 2022 budget. Finance Minister Nirmala Sitharaman has announced various initiatives targeting raw material and input costs, technology development, credit access, infrastructure development, and business ease.

In the speech, the Finance Minister said the Emergency Guarantee Line of Credit Scheme (ECLGS) has provided more than 130,000 small businesses with much-needed additional credit and extended from March 2022 to March 2023. The warranty coverage has also been extended and now offers total coverage of Rs. 5 crores in crores, including additional amounts only for entertainment and related businesses.

Small pieces make the bigger picture, and as said, the MSME sector is well equipped to play a pivotal role in the economy.

Highlights from the 202223 Union Budget for Small Businesses and Startups include:

  • The Udyam, NCS, e-Shram, and ASEEM portals could be interlinked, and their scope could be widened to carry out as portals containing live, natural databases presenting B2C, G2C, and B2B offerings. These offerings will relate to skilling, credit score facilitation, and recruitment to, in addition, formalize the economic system and beautify entrepreneurial possibilities for all.
  • There could be an extension of the Emergency Credit Line Guarantee Scheme (ECLGS) until March 2023, and its assured cowl could be extended via a complete cowl of Rs. Five lakh crore specializing in hospitality and associated organizations.
  • The CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) scheme could be remodeled with the infusion of the specified funds. It will facilitate extra credit scores of Rs.2 lakh crore for micro and small organizations and make more extensive employment possibilities.
  • The Raising and Accelerating MSME Performance (RAMP) program will roll out with an outlay of Rs.6,000 crore over 5 years. The RAMP will assist the MSME region to end up extra competitive, resilient and efficient.
  • Startups are funding to enable “Drone Shakti” through various Drone as a Service (DrAAS) applications. In this regard, the required qualification courses are adopted in all federal states of the selected ITI.
  • Defense R & D is open to start-ups, industry, and academia, with 25% of the defense R & D budget allocated. The
  • Mixed Capital Fund, enabled by NABARD, will be raised under a co-investment model to fund start-ups in agricultural and rural businesses related to the agricultural value chain. The activities of these start-ups include technologies including farm-level rental-based farm equipment, FPO support, and IT-based support.

Tax Benefits under the new regulations:

  • Technology including farm-level rental-based farmers, FPO support, and IT-based support. Tax incentives for startups with EU budget 2022
  • Eligible startups established before March 31, 2022, have received tax incentives for the third consecutive year of establishment. Considering the COVID pandemic, the Minister of Finance has proposed to extend the establishment period of qualified startups by another year until March 31, 2023, to create such tax incentives.
  • The government has introduced a 15% concessional tax system for newly established domestic manufacturing companies to create a globally competitive business environment. The Minister of Finance has proposed extending the final production date or production under § 115 BAB by one year, from March 31, 2023, to March 31, 2023.
  • A one-year extension of the tariff exemption that the government gave to scrap steel last year to bail out MSME’s secondary steel producers.

Concessional Corporate Tax:

  • The Minister of Finance also announced that another 15% would extend the concessional corporate tax rate for newly established manufacturing companies for another year. “To create a globally competitive business environment for certain domestic companies, our government has introduced a 15% tax incentive for newly established domestic manufacturing companies. We propose extending the final production date or production for one year, from 31 March ‘23 to 31 March ’24.
  • A 15% tax extension to new production units by 2024 will attract more investment in the short term and support the Make in India initiative promoted through the Production Linked Incentive (PLI) scheme and similar schemes.

What the industry leaders had to say about the Union Budget 2022-2023:

IDBI Bank’s MD & CEO Rakesh Sharma said the extension of ECLGS by March 2023 and the expansion of CGTMSE’s coverage will benefit MSME, the primary beneficiary of the scheme.

 Kuldip Maity, MD and CEO of Village Financial Services (VFS), said expanding the ECLGS program is essential for the MSME sector, which a pandemic has hit. Credit and tax support of Rs 5 lakh crore will ease pressure on the sector and encourage new businesses to be launched in parallel with job creation.

Umesh Revankar, VC and MD of Shriram Transport Finance, said Union Budget 2022 is a bold, growth-oriented budget with synergistic effects on the economy and benefits Aam Aadmi. However, the direct transfer of profits is there is none.

 Hardika Shah, Founder and CEO of Kinara Capital said: Pave the way for sustainable and responsible sector development. The digital focus of the budget, which supports the digital ecosystem and payment platforms, is also a good sign for SMEs as it predicts the future of technology in the sector. “

Altigreen Propulsion Labs, Founder, and CEO, Amitabh Saran

 The announcement by Finance Minister Nirmala Sitharaman encourages all stakeholders in the EV segment (buyers, manufacturers, sellers), accelerating the adoption of EVs in the country. Today, there is a tremendous demand for last one-mile deliveries in the country, and a surge in e-commerce is driving growth.

 Rajesh Ranjan, Founder of Krishify

Union Budget 2022 was a significant development, and it was stimulating to hear the government’s interest in digital services digital records. However, I’m curious about the government’s steps to put these initiatives into action. I have. Significant initiatives have incorporated equipment and technologies such as “farm drones” for crop evaluation and pesticide application.

 George Alexander Mututo, MD of Muthoot Finance

 Budget 202223 focuses on investment to create growth and jobs and prioritizes economic growth. The announcement of MSME and the promotion of digital banking will significantly help support the economy. The MSME sector is one of the hardest-hit sectors during the pandemic. The government focuses on further supporting the MSME sector and reducing stress in this segment.

 Gunita Pahwa, Co-Managing Partner, S & A Law Firm

 We welcome the government’s decision to establish an international arbitration center in Gift City, Gujarat. Arbitration is a valid alternative dispute resolution mechanisms globally, and government initiatives are a further step towards strengthening dispute resolution through arbitration in India.

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