The fifth budget session by the current NDA government was one that seemed to be all about the upcoming elections. The focus this year was on agriculture, women, digital, infrastructure, social security, governance, health and education, with little relief to the salaried and middle class. That being said, the government has continued to encourage the MSME sector and put forth noteworthy proposals to benefit them.
Here is a look at the key takeaways of the Union Budget 2018 for businesses and SMEs in general.
Key Highlights of the 2018 Union Budget
- MSME corporate tax reduced to 25% for enterprises with turnover of up to Rs 250 crore which is 99% of the companies that file returns. This makes the playing ground for larger corporates more competitive.
- Mass formalisation of MSME sector after demonetization and GST with Rs 3,794 crore being set aside for MSME towards capital support and industry subsidy.
- Government to soon announce measures to address non-performing assets of MSMEs.
- Rs 3 lakh crore for lending under to be allocated in FY 19 for PM’s MUDRA Yojana. This is a positive step for MSME and job creation.
- In a bid to further help domestic smartphone manufacturers, customs duty on mobile phones by Apple, Samsung and the like, hiked to 20% from 15%.
- Government also proposes 10% social welfare surcharge on imports.
- Revamped loan sanction system for MSMEs by linking to GSTN from were all required information can be fetched for easy loan sanctions.
- Special Rs. 2600 crore package announced for job creation in leather and footwear sectors.
- To help MSMEs gain easy access to working capital, the government has resolved to help digital lending entities working in this space.
- Loans to women self-help groups to be increased to 75,000 crore by March 19.
- Set up of Model Aspirational Skill Center in every district of the country under Pradhan Mantri Kaushal Kendra Programme.
The Finance Minister, Arun Jaitley in his budget speech laid emphasis on ‘Ease of Living’ and not just ‘Ease of Doing Business’. The FM also said, “The Government will now start a scheme where every enterprise will be assigned a unique ID.” Though the budget did not elaborate on the implementation of this project, this could likely be an extension of the Udyog Aadhaar scheme that was launched in 2015 by the MSME ministry under which over 3 million enterprises across the country are currently enrolled. By extending it to include larger enterprises, it can ensure robust tracking and traceability to avoid misuse of public money. It remains to be seen how business owners would react to this move given that Aadhaar in itself is facing problems with regards to privacy violations.