Budget 2019-20: A shot in the arm for struggling MSMEs

The sector was a major area of focus in her Budget speech

Updated - July 05, 2019 10:52 pm IST

Published - July 05, 2019 10:51 pm IST - MUMBAI

Kalyan Krishnamurthy, CEO, Flipkart Group. File

Kalyan Krishnamurthy, CEO, Flipkart Group. File

Struggling Micro, Small and Medium Enterprises (MSMEs) have got a boost of 2% interest subvention scheme in the Union Budget announced by Finance Minister Nirmala Sitharaman, as “Make in India,” with particular emphasis on MSMEs, was one of the major areas of her Budget speech.

The government has introduced a scheme for providing loans up to ₹1 crore within 59 minutes through a dedicated online portal.

Also, ₹350 crore has been allocated for Financial Year 2019-20 for 2% interest subvention for all GST registered MSMEs on fresh or incremental loans.

“In continuation to bolstering MSME sector growth, interest subvention of 2% has been announced for fresh or incremental loans. This keeps the supply chain intact and registered assessees get additional buoyancy in this sector,” said Sohrab Bararia, Associate Partner/ Indirect Tax, BDO India.

The Finance Minister announced the government’s intent to create a payment platform for MSMEs to enable filing of bills and payment on the platform itself to eliminate delays in government payments.

Mr. Kalyan Krishnamurthy, CEO, Flipkart Group, commenting on the budget said, “As the Prime Minister Modi-led government continues to push for Ease of Doing Business for MSMEs and industries, we at Flipkart Marketplace will be happy to continue connecting millions of MSME sellers, manufacturers and artisans with consumers efficiently & in cost effective manner.”

The government will extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than ₹1.5 crore under a new scheme named Pradhan Mantri Karam Yogi Maandhan Scheme . Enrolment will be kept simple requiring only Aadhaar and a bank account.

“The budget provides a blueprint for the Prime Minister’s vision of a $5 trillion economy, with a focus on ease of doing business for MSMEs and ease of living for citizens,” said Anupam Pahuja, Managing Director, PayPal India. “The Budget emphasises on enabling growth for traditional industries and artisans, while offering them business and technology incubation facilities, which is commendable.”

Under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI), 100 new clusters will be set up during 2019-20, enabling 50,000 artisans to join the economic value chain.SFURTI aims to set up Common Facility Centres (CFCs) to facilitate cluster-based development to make traditional industries more productive, profitable and capable for generating sustained employment opportunities. Focused sectors are Bamboo, Honey and Khadi clusters.

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