‘Financial Boost & Regulatory Streamlining Expected for MSMEs from Budget 2018’ says Satya Prabhakar of Sulekha.com, while sharing other important suggestions for Mr. Arun Jaitley ahead of Union Budget 2018.
SMEStreet Pre-Budget 2018 Conversations with Entrepreneurs
India has 10 to 15 million services MSME’s who run a wide variety of businesses. Across coaching & training services (school tuitions, computer training, job training, entrance exam coaching) or home/business services (catering, pest control, security guards, interior decoration, architect), our lives are impacted by tens of such small businesses who help consumers in most of the metro cities.
Mr. Satya Prabhakar, Founder and CEO, Sulekha, said, “Most of these MSME’s have 1 to 5 employees and face 3 key challenges in growing their businesses – financial (funding, credit), customer acquisition (acquiring new customers, retaining existing ones) and regulatory compliance (forms, taxes).”
While large organizations can rely on multiple experts to solve all three aspects, MSME’s need a lot more support from the Government to help them scale-up.
Mr. Prabhakar also suggested the Budget 2018 can help MSME in these two aspects:
1) Help provide uncollateralized credit:
While a lot of Fintech organizations promise small-ticket personal loans, the ability to provide loans in the region of Rs. 2 to 10 lakhs using little collateral is beyond the ability of startups. The Govt. can aid in scaling up business loans for service MSME’s.
2) Reducing or removing GST on promotional spends:
Most MSME’s may come under the GST composition scheme that has a business turnover limit of Rs. 1.5 crores currently. Budget 2018 can look to see if marketing and promotional spends did by such entities are fully exempt from GST. This will help them to further invest and grow their business.
Once MSME’s cross this limit, they can easily start paying the additional 18% tax and grow their business further.