The Union Budget 2023–24 is planned to maintain the financial sector reforms and creative technology use that have facilitated easy access to credit and participation in financial markets, giving MSMEs a major boost. The revised loan guarantee programme for MSMEs that was planned in the last Budget will go into action on April 1st, 2023 thanks to an injection of Rs 9,000 crore into the corpus, according to Finance Minister Nirmala Sitharaman. "This will provide for an additional Rs 2 lakh crore of collateral-free guaranteed loans. Additionally, the cost of loan will decrease by around 1% "She spoke.
To help MSMEs, the Finance Minister recommended that in cases where MSMEs failed to complete contracts during the Covid term, the government and government undertakings would reimburse 95% of the forfeited sum related to bid or performance security. A voluntary settlement plan with standardised terms will be implemented to resolve contractual disputes between the government and government undertakings where an arbitral judgement is being contested in court. This will be accomplished by providing graduated settlement terms based on the dispute's state of pending litigation. The Finance Minister claimed that MSMEs are the growth engines of our economy and that presumptive taxation is available to micro companies with a turnover of up to Rs 2 crore and some professionals with a turnover of up to Rs 50 lakh. She also suggested giving tax payers with cash receipts of little more than 5% higher limits of Rs. 3 crore and Rs. 75 lakh, respectively. Sitharaman further suggested allowing deduction for expenses incurred on payments made to MSMEs only when payment is actually made in order to encourage MSMEs in timely receipt of payments.
The creation of a National Financial Information Registry, which will act as a central repository for financial and related data, was also announced by the finance minister. "This will promote financial inclusion, foster financial stability, and facilitate efficient flow of credit," she said. The credit public infrastructure would be governed by a new legal framework that will be developed in collaboration with the RBI, according to Sitharaman. The Finance Minister claimed that MSMEs are the growth engines of our economy and that presumptive taxation is available to micro companies with a turnover of up to Rs 2 crore and
some professionals with a turnover of up to Rs 50 lakh. She also suggested giving tax payers with cash receipts of little more than 5% higher limits of Rs. 3 crore and Rs. 75 lakh, respectively. Sitharaman further suggested allowing deduction for expenses incurred on payments made to MSMEs only when payment is actually made in order to encourage MSMEs in timely receipt of payments.
The creation of a National Financial Information Registry, which will act as a central repository for financial and related data, was also announced by the finance minister. "This will promote financial inclusion, foster financial stability, and facilitate efficient flow of credit," she said. The credit public infrastructure would be governed by a new legal framework that will be developed in collaboration with the RBI, according to Sitharaman.
Sunil Kharbanda, Co-Founder & COO, Trezix, said, "The spirit of resilience has been proven by the 6.3 crore micro, small, and medium firms, which account for 30% of GDP and employ approximately 11 crore people. With sales in numerous industries throughout the MSME sector surpassing 90% of pre-pandemic levels, India's small firms are rewriting history with enhanced import-export trade and driving business globally. The budget shows positivity and has reduced import duties on raw materials to support Make in India and MSMEs, enhancing competitiveness in global markets and leading to a rise in exports."
Dr Saundarya Rajesh, Founder – President, Avtar Group, said, “The Union Budget 2023 by Smt. Nirmala Sitaraman, Honorable Minister of Finance, Government of India presented as the Last Mile Inclusion budget has covered the cohorts such as indigenous tribes, youth, MSME's, women and senior citizens with a potentially impactful list of benefits being offered to them. The sustainable city program is an applaudable move for it is one of the key inclusion measures required to increase women’s workforce participation. When there is a focus on capital expenditure spending on infrastructure, it is bound to have a ripple effect on women’s employment. As per Avtar's recent report on Top Cities for Women in India report, more industrial investment in cities result in ecosystem infrastructure improving including day care facilities, commute facilities and medical amenities. This can act as a catalyst to enable women's employment, thereby improving women's workforce participation in the country. However, despite our President of India expressing concerns over the skewed gender ratio in economic activity, no specific schemes for the urban working women have been announced. As per the data available, between 2019-20 and 2020-21, rural women’s labour force participation rate (LFPR) increased from 33% to 36.5%, while urban women’s LFPR fell from 23.3% to 23.2%. There has not been a significant rise in this population, a talent segment that contributes significantly to the country’s GDP. If women’s workforce participation has to burgeon, then corporates have to be incentivized to hire and sustain this underrepresented talent pool. The only silver lining is the heavy focus on skilling – the Unified Skilling Platform and its link to MSMEs, a sector that has the potential to boost women’s workforce participation.”
Javed Tapia, Founder & Managing Director, Clover Infotech, said, “The measures introduced in the Union Budget 2023 in terms of ease of doing business such as reducing compliance requirements and legal provisions will play a key role in attracting global investments into India. By relaxing contract execution policies, facilitating availability of credit, and extending tax benefits to start-ups and MSMEs, the FM has taken progressive steps to build a favourable support ecosystem for start-ups and MSMEs. The training and skilling initiatives under the ‘Make AI in India’ and ‘Unified Skill India Digital Platform’, will create a highly skilled workforce that can significantly accelerate our economic growth.”
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