Good vision, big boost to MSME!
MSMEs provided Rs 3794 Crore
for Credit Support & Innovation!
Finance Minister Shri Arun Jaitley presents general Budget 2018-19 in Parliament. Budget guided by mission to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors!
At the juncture Narendra Modi, PM India said: “For a long time, the small and medium enterprises or the MSME in our country had to pay higher taxes than the big industries. In a bold in this budget, the government has reduced the tax rate for MSME by 5% now they will have to pay 25% tax in place of 30% which was the practice earlier.
Credit seeking facility from the banks and NBFCs has been eased to ensure the required working capital for MSME industries. It will give a boost to the mission of Make in India. MSME sector has been experiencing stress due to NPA in big industries.
The small entrepreneurs must not suffer because of the fault of others. Therefore, the government will soon announce corrective measures to resolve the problems related to NPA and Stressed Account in the MSME sector.
Arun Jaitley in an announcing that a provision of Rs. 3794 crore has been provided in the General Budget 2018-19 for the Medium, Small and Micro Enterprises (MSMEs),the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley said that this has been done to provide credit support, capital and interest subsidy and innovations to this Sector.
Strongly emphasising that creation of job opportunities and facilitating generation of employment has been at the core of policy-making of the Government over the last three years, the Finance Minister mentioned that an independent study conducted recently has shown creation of 70 lakh formal jobs this year.
Shri Jaitley pointed out that the Government will contribute 12% of the wages of the new employees in the Employee Provident Fund (EPF) for all the sectors for next three years. The Finance Minister also referred to the extension of the facility of fixed term employment to all sectors. He underlined that the Government will soon announce measures for effectively addressing non-performing assets and stressed accounts of MSMEs.
In an effort to reduce tax burden on MSMEs and to create large-scale employment, Shri Jaitley also announced measures to extend the benefit of reduced rate of 25% to companies who have reported turnover up to Rs.250 crore in the Financial Year 2016-17. “This will benefit the entire class of micro, small and medium enterprises which accounts for almost 99% of companies filing their tax returns,” the Finance Minister said. He expressed confidence that the lower Corporate Income Tax rate for 99% will leave companies with higher investible surplus, leading to creation of more jobs.
Shri Jaitley, the Finance Minister, laid emphasis on the effort to provide incentive to employment of more women in the formal sector. He added that this will lead to higher take-home salary. “Amendments have been proposed to reduce women employees' contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers' contribution in the Employees Provident Fund and Miscellaneous Provisions Act, 1952,” Shri Jaitley stated.
The Finance Minister announced that the Government is setting up a model aspirational skill centre in every district of the country under Pradhan Mantri Kaushal Kendra Programme. Shri Jaitley said that he proposed to onboard Public Sector Banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link it to GSTN. “Online loan sanctioning facility for MSMEs will be revamped for quick decision making by the banks,” he said.
Shri Jaitley referred to the review of the refinancing policy and eligibility criteria set by MUDRA for better refinancing of Non-Banking Finance Companies NBFCs. In this regard, he proposed setting a target of Rs.3 lakh crore for lending under MUDRA for 2018-19, as the targets had been exceeded in all previous years.
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The Finance Minister also referred to a Group in the Finance Ministry that is examining the policy and institutional development measures needed for creating right environment for Fintech companies to grow. He also stated that additional measures will be taken to strengthen the environment for Venture Capital Funds and for their growth and successful operation of alternative investment funds in the country.
This will benefit the entire class of Micro, Small and Medium Enterprises which accounts for almost 99% of companies filing their tax returns. Accepting Rs 7,000 crores as the estimated revenue forgone due to this measure during the financial year 2018-19, the Finance Minister, while presenting the General Budget 2018-19 in Parliament.
FM said, “This is towards fulfilment of my promise to reduce corporate tax rate in a phased manner.” He further added, “The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs.”
The Finance Minister recalled that in the Union Budget 2017, he had announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs.50 crores in financial year 2015-16. This had benefitted 96% of the total companies filing tax returns.
The Finance Minister also said that after this measure, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs.250 crores will remain in 30% slab.
