The Budget has given a big thrust to Micro, Small and Medium Enterprises (MSMEs) to boost employment and economic growth providing Rs 3,794 crore for giving credit support, capital and interest subsidy and for innovations.
MUDRA Yojana launched by the government has sanction of Rs 4.6 lakh crore in credit from Rs 10.38 crore MJUDRA loans, informed Vijay Kalantri, president, All India Association of Industries (AIAI).
In an effort to reduce tax burden on MSMEs and to create large-scale employment, the Budget 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.
Kalantri further expressed confidence that the lower Corporate Income Tax rate will leave 99% companies with higher investible surplus, leading to creation of more jobs.
Kalantri said, “The proposal to onboard Public Sector Banks (PSB) and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link it to GSTN, Online loan sanctioning facility for MSMEs shall revamp for quick decision making by the banks, also to review the refinancing policy and eligibility criteria set by MUDRA for better refinancing of Non-Banking Finance Companies (NBFCs). The proposed setting target of Rs 3 lakh crore shall benefit MSMEs.”
The Finance Ministry is examining the policy and institutional development measures needed for creating right environment for Fintech companies to grow. Further, various additional measures may strengthen the environment for Venture Capital Funds and for growth of MSME and successful operation of alternative investment funds in the country for this sector.
AIAI further feels that the budget lays strong emphasis on rural and agro economy by boosting food processing, organic farming and various initiatives to create rural infrastructure which is a dream of the Prime Minister to double the income of farmers by 2022 make it a reality.
The various sops given for promotion of Women Empowerment, textile and infrastructure sector may make it possible to achieve 8% GDP growth and contain fiscal deficit to 3.3%, said Kalantri.