Bud­get Boost for MSME

Perfect Sourcing - - Cover Story -

MSME was one of the sec­tors that faced the worst im­pact of GST. To com­pen­sate the fall, the gov­ern­ment in­cor­po­rated var­i­ous mea­sures in its re­cent bud­get (2018-19). A few of these mea­sures were: tax con­ces­sion

The low­er­ing of cor­po­rate tax from 30 per cent to 25 per­cent for com­pa­nies hav­ing a turnover up to Rs 250 crore. The gov­ern­ment has changed the cri­te­ria of clas­si­fy­ing MSMES from in­vest­ment in plants and ma­chin­ery to the com­pany turnover, they will di­rectly ben­e­fit from the low­ered cor­po­rate tax. The turnover cri­te­ria clas­si­fies com­pa­nies hav­ing a turnover of up to 5 crore as mi­cro, 5-75 crore as small, and 75-250 as a medium en­ter­prise.

Apart from bud­get re­lief, the Re­serve Bank of In­dia (RBI) an­nounced ad­di­tional 180 days for MSMES to clear their dues against loans. The gov­ern­ment is also tar­get­ing re­cap­i­tal­i­sa­tion of the banks to en­able their lend­ing ca­pac­ity by Rs 5 lakh crore, of which a sub­stan­tial chunk would be used by MSMES, as ex­pected by the gov­ern­ment.

The RBI has also re­moved the pri­or­ity sec­tor cap for MSME loans, which is ex­pected to di­rect ad­di­tional re­sources to this sec­tor. Mean­while, the banks have been al­lowed to treat all MSME loans as pri­or­ity sec­tor loans without any limit on their ex­po­sure.

Re­cently in Fe­bru­ary 2018, the Fi­nance Min­is­ter Arun Jait­ley launched the Crisidex, the first sen­ti­men­tal in­dex for MSMES. Crisidex has been jointly de­vel­oped by rat­ing agency, CRISIL and Small In­dus­tries De­vel­op­ment Bank of In­dia (SIDBI), and is a com­pos­ite in­dex to mea­sure MSME busi­ness sen­ti­ments on a scale of zero (ex­tremely neg­a­tive) to 200 (ex­tremely pos­i­tive).

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