![Budget expectations](https://img-cdn.thepublive.com/fit-in/1280x960/filters:format(webp)/smstreet/media/media_files/jlDK4qa0U6g3NBXK60Kh.png)
SMEStreet has identified several key expectations from the Union Budget 2024, which reflect the needs and aspirations of the Indian MSME sector. These expectations focus on enhancing financial support, tax relief, infrastructure development, policy reforms, export promotion, skill development, and sustainability initiatives.
1. Financial Support and Credit Access
Expectations:
- Increased Allocation for MSME-Specific Schemes: MSMEs are seeking more funding for schemes tailored to their unique challenges. This includes enhancing the Credit Guarantee Fund Scheme and other initiatives that support MSME growth (SME Street).
- Simplified and Expanded Credit Guarantee Scheme: MSMEs demand an expansion and simplification of the credit guarantee scheme to facilitate easier access to financing. Lower interest rates on loans specifically tailored for MSMEs are also critical to alleviate financial burdens and promote growth (SME Street).
- Lower Interest Rates: The sector is pushing for reduced interest rates on MSME loans to make credit more affordable and stimulate business activities (SME Street).
2. Tax Relief and Simplification
Expectations:
- Reduction in Corporate Tax Rate: MSMEs advocate for a reduction in the corporate tax rate to align with global standards, which would help stimulate business activities and attract investment (SME Street) (SME Street).
- Simplified GST Compliance Procedures: Simplifying GST compliance is essential to reduce the administrative burden on small enterprises. MSMEs are calling for easier filing procedures and fewer regulations to comply with (SME Street).
- Tax Holidays and Incentives: Introducing tax holidays or incentives for newly established MSMEs would encourage entrepreneurship and innovation, providing a boost to nascent businesses (SME Street).
3. Infrastructure and Digitalization
Expectations:
- Improved Physical Infrastructure: There is a strong demand for better infrastructure, including industrial parks, improved logistics, and transportation systems that benefit MSMEs (SME Street).
- Support for Digital Transformation: MSMEs are looking for support to adopt new technologies, which would enhance their operational efficiency and competitiveness. This includes initiatives for better digital infrastructure and e-commerce platforms (SME Street).
- Common Facility Centers: Developing common facility centers equipped with advanced machinery and technology would significantly aid MSMEs in staying competitive (SME Street).
4. Policy Reforms and Ease of Doing Business
Expectations:
- Simplified Regulatory Procedures: MSMEs want streamlined regulatory procedures to make it easier to start and run their businesses. Simplified regulations would reduce bureaucratic hurdles and promote a more business-friendly environment (SME Street).
- Streamlined Labor Laws: Simplifying labor laws to balance the interests of workers and employers is crucial for promoting job creation and ensuring a stable workforce (SME Street).
- Enhanced Support for Start-ups: Providing more support for start-ups and innovation-driven MSMEs would catalyze growth and diversification within the sector (SME Street).
5. Export Promotion and Market Access
Expectations:
- Incentives and Subsidies: The budget should include incentives and subsidies that boost exports, open new markets, and reduce trade barriers. This will help MSMEs expand their reach internationally (SMEStreet).
- Participation in Trade Fairs: Support for participation in international trade fairs and exhibitions would give MSMEs greater exposure and opportunities to scale up (SMEStreet).
6. Skill Development and Training
Expectations:
- Focus on Skill Development Programs: Enhanced focus on skill development programs tailored to the specific needs of MSMEs is imperative. Partnerships with educational institutions for vocational training and upskilling would ensure that employees are well-equipped to meet industry demands (SMEStreet).
7. Sustainability and Green Initiatives
Expectations:
- Incentives for Sustainable Practices: MSMEs are seeking incentives for adopting sustainable practices and transitioning to green technologies. This includes support for renewable energy adoption, which would reduce operational costs and align MSMEs with global environmental standards (SME Street).
- Support for Renewable Energy: Promoting the use of renewable energy within MSMEs not only helps reduce costs but also makes them more attractive to environmentally conscious consumers and international partners (SME Street).
These detailed expectations aim to enhance the competitiveness, efficiency, and sustainability of MSMEs, ensuring they continue to be a driving force in the Indian economy. By addressing these needs, the Union Budget 2024 can significantly bolster the MSME sector's contribution to economic growth and development.
-
Jul 22, 2024 19:30 ISTBanker's Expectation from Union Budget 2024
Mr. Prashant Kumar, MD & CEO, YES BANK expressed his views by quoting,
“The Union Budget 2024 is expected to play a crucial role in shaping India's economic future. This is especially as the tax revenue collections have remained robust and the government is also armed with a bumper dividend from the RBI. The government is expected to remain committed to the reforms process and be focused on eight key areas: sustainable growth, financial sector, infrastructure and investment, women, youth & farmers, last-mile connectivity, inclusive development, and economic expansion – all essential towards achieving 'Viksit Bharat' by 2047.
The government has exhibited its commitment towards fiscal discipline, much necessary to signal economic stability and build investor confidence. However, the government is also expected to balance this objective together with the needs for economic growth and providing adequate outlays for key social sector programs, in an effort towards inclusive growth and ensure that the benefits of economic development reach all segments of society. In this context the government is likely to lay stress on ensuring skill developments, focus on enhancing the strength of the manufacturing sector via sharpening the PLI scheme and provide adequate support for small business to grow.
At YES BANK, we are prepared to support the government’s push for enhancing digital infrastructure and promoting financial inclusion. This aligns with our commitment to bringing advanced banking services to underserved regions and supporting initiatives in green mobility, affordable housing, healthcare, and education. These efforts will not only spur economic growth but also ensure holistic development.
We are particularly excited about growth in manufacturing and support for MSMEs, which are vital for job creation and economic dynamism. YES BANK stands ready to contribute to India's journey towards becoming one of the world's largest economies.”
Mr. Rajan Pental, Executive Director, YES BANK expressed his expectation from the hon'ble Union Finance Minister by saying,
As we approach the Union Budget 2024, there is strong anticipation for comprehensive measures to empower the MSME sector, crucial to India’s economic growth. We expect the government to focus on expanding the ecosystem for new-to-credit borrowers, particularly through provisions under Informal Micro Enterprises (IME). Digital transformation remains a key priority. Investments in digital infrastructure and incentives for MSMEs to adopt modern technologies will improve operational efficiencies and market reach. Government schemes like PM Vishwakarma, PMJDY, and PMMY are essential in supporting MSMEs, particularly those finding it difficult to access credit.
At YES BANK, we have grown significantly in our financing under CGTMSE and are committed to supporting financial inclusion for MSMEs. We are building an ecosystem where loans can be sanctioned and disbursed digitally to micro-entrepreneurs. Additionally, the surge in Udyam registrations, with nearly 25 million in the past year, highlights the growing support for smaller MSMEs. We believe that with the continued support from the government, MSMEs can drive India's economic growth and resilience, significantly contributing to a vibrant and sustainable business ecosystem.
Mr. Mahesh Ramamoorthy, Chief Information Officer, YES BANK stated, “As we look forward to the Union Budget 2024, enhancing our technology infrastructure and fostering innovation remains crucial. The government's groundwork with initiatives like the JAM Trinity and investments in digital infrastructure is commendable. Building on this, further support for technologies such as AI, blockchain, and IoT will be vital for driving digital transformation and improving efficiency. Establishing a continuum of cybersecurity measures is essential to improving an organisation security posture. Investments in advanced threat intelligence and robust encryption will protect our digital assets and build user trust. Additionally, improving data privacy and governance will ensure compliance with global standards and safeguard user information.
Promoting a culture of continuous learning and innovation is key to attracting and retaining top tech talent. The government can facilitate this by providing policy support, funding for technology initiatives, and creating an enabling environment for innovation. The private sector, including institutions like YES BANK, can then provide access to advanced tools and reskilling programmes to drive sustained growth and innovation. At YES BANK, we are committed to leveraging these advancements to support our customers and drive economic growth. We look forward to the government's continued support in these critical areas to achieve a technologically advanced and sustainable future for India."
-
Jul 18, 2024 18:11 IST'Union Budget 2024 Must Promote R&D for AgriTech Sector'Sharing a perspective towards AgriTech sector, Mr. Sanjay Borkar, CEO & Co Founder, FarmERP shared his expectation from Mrs Finance Minister ahead of Union Budget 2024 Speech by quoting,
"In the upcoming Union Budget, the Agritech industry holds high expectations for significant advancements in new-age technologies and the integration of sustainability within agriculture. Enhanced funding for technology adoption is critical, with increased investments in AI, machine learning, and blockchain needed to revolutionize farming practices, enhance productivity, and ensure sustainable growth. Tax incentives and subsidies for Agritech startups will accelerate innovation and attract young entrepreneurs to the sector.
Establishing additional research and development centers focused on agricultural technology will foster innovations and provide practical solutions for farmers and agribusinesses.
The industry also urges the government to enhance digital infrastructure in rural areas, recognizing reliable internet connectivity as crucial for farmers to access modern agricultural tools and platforms. Introducing policies that promote sustainable farming practices and climate-resilient technologies is imperative for achieving long-term environmental and economic benefits.
These measures will not only support the Agritech industry's growth but also contribute to a more sustainable and resilient agricultural sector, benefiting both the agriculture industry and the broader economy."
-
Jul 18, 2024 17:34 IST'Banking & Taxation Ease for SMEs and Startups Is Expected'
Mr. Anirudh A Damani, Managing Partner- Artha Venture Fund shared his perspective on taxation structuring and he expressed his expectations by saying, "As the new government's first budget, our expectations are notably high. We anticipate significant measures to streamline the entrepreneurial ecosystem, starting with removing the angel tax regime, which currently burdens startups substantially. Additionally, reducing GST slabs and abolishing other indirect tax regimes in favor of a single, efficient GST system would greatly simplify compliance for businesses.
Another crucial initiative would be establishing a business bank catering to SMEs and startups. Traditional banks often fail to meet the unique needs of these entities. A dedicated business bank could unlock vital credit and provide essential financial services tailored to business needs, such as business savings accounts, working capital loans, and business banking credit cards.
Investors also look forward to a more straightforward tax regime, particularly the harmonization and simplification of LTCG (Long-Term Capital Gains) and STCG (Short-Term Capital Gains) taxes for listed securities and startups. Simplifying the complex web of tax laws would reduce confusion and minimize harassment from tax authorities who may misinterpret the regulations.
While tax reduction is always welcome, the primary need of the hour is simplifying the tax code. Implementing a direct tax code, as promised for many years, would be a monumental step towards achieving a more transparent and efficient tax system.
Our high expectations reflect the potential for this budget to foster a more robust and supportive environment for startups and SMEs, driving economic growth and innovation."
-
Jul 16, 2024 16:17 IST'Logistics and Supply Chain are Lifeline of MSMEs: Must be Focused in Union Budget 2024'Mr Uday Sharma - Chief Commercial Officer - Allcargo Gati Limited stated, "The logistics subsector is undergoing numerous changes to address infrastructure and technology challenges. As the lifeline of the MSME sector, the logistics and supply chain industry plays a crucial role in efficiently delivering their products and enabling them to reach the market or their destination. MSMEs rely heavily on their third-party logistics providers to operate smoothly, as they often face limitations due to a lack of capital or resources.
The upcoming budget should create an environment where MSMEs can flourish with well-developed logistic infrastructures based on sustainable practices. We expect the budget to prioritize investments in infrastructure development, digitalization, and skill development, which will further empower MSMEs. Our commitment goes beyond providing logistics; we actively support programs that enhance operational efficiency and competitiveness for MSMEs. Through various initiatives like capacity-building workshops, digital transformation projects, and skill development programs, we strive to grow and sustain MSMEs. -
Jul 16, 2024 15:36 ISTBudget 2024 Must Motivate Consumers' SpendingMr. Shyam Prasad, CEO, Brand Studio Lifestyle shared his expectations by adding, “As we approach the upcoming budget announcement, we hope that the government will focus on boosting disposable income, especially for the salaried class, through tax benefits and dedicated rural community initiatives. The fashion segment being dynamic and highly responsive to changes in consumer behaviour, economic policies, and market trends. We hope the government will prioritise initiatives and investments to stimulate consumer spending, and also align with the ongoing infrastructure development initiatives. Moreover, the rise in rural spending provides a great opportunity to expand the consumer base in e-commerce, helping it grow and reach more people. Online shopping is becoming more popular among rural consumers, giving them access to a wider range of products and better deals. These strategic measures are primed to fuel not just economic growth but also pave the way for inclusive development and vibrant market opportunities across various sectors.”
-
Jul 15, 2024 15:40 ISTMore Thrust to MSMEs' Development: Union Budget 2024 ExpectationAnil Kumar Gupta, Partner, MicroSave Consulting (MSC) commented while sharing a perspective towards his expectations from the upcoming Union Budget 2024-25.
"The philosophy of ‘Sabka ka Saath’ and “Jan Dhan” has greatly impacted how people bank and access financial services. “Viksit Bharat”, in the long run, can only ride on holistic and inclusive growth. This requires bridging the digital divide, empowering women and vulnerable groups financially, and encouraging savings so that Bharat can unlock true economic potential for all. With the gains of several financial inclusion initiatives, it indeed is the right time to consolidate them further under the "Jan Dhan se Jan Samrudhi" vision. Imagine that every citizen is empowered with financial services (Jan Dhan), confidently utilizing them across channels (digital, physical) to build a secure financial future (Samrudhi). A concerted effort in this direction will contribute significantly to developed and equitable Bharat."
-
Jul 15, 2024 13:38 ISTIndian Space Association Shares Expectations from Union Budget 2024
Indian Space Association, the industry association representing private space companies in the country, has put forward recommendations for the Union Budget 2024-25 aimed at boosting the industry's financial and overall health. These suggestions, focused on the upcoming Union Budget 2024-25, highlight the need for financial incentives and strategic government support to propel the space industry forward.
The key highlights of the recommendations are as follows:
- Expansion of GST to Launch Vehicles, Ground Systems & Critical components of Satellites
The industry widely acknowledged GST exemption provided on satellite launch services. However, for the benefit of the sector’s value chain, ISpA advocates that the exemption can be extended to other critical components of satellites, ground systems, and launch vehicles. Further, while such exemption reduces GST cost on output activity of satellite launch services, the resultant impact on the input tax credit on procurement of goods and services should also be analysed.
Thus, similar exemption should be provided for the procurement of key goods and services (including capital goods) by business for the purpose of satellite launch services. This will help reduce the GST input tax credit costs and the intended benefit would be enjoyed by the supply chain.
- Tax Exemptions/Tax Holiday and Custom-Duty Exemptions
As space industrial parks are planned to be developed in various states, several non-government entities (legacy + start-ups) plan to make large greenfield investments. ISpA urges the government to introduce tax holidays and exemptions for space sector firms to stimulate growth within the space sector. Furthermore, we suggest concessions on customs duties for notified imports, which would ease the financial burden on these companies.
- Reduction of Tax-rate on Interest on Foreign Borrowings:
Recognizing the capital-intensive nature of the space industry for activities such as research and development, satellite manufacturing, and the construction of satellite launch and earth stations, ISpA recommends lowering the tax rate on interest on foreign borrowings to 5%. This would facilitate easier access to necessary foreign funding at cost-effective interest rates for project financing.
- Reduced Withholding Tax for Satellite Sector:
The withholding tax rate applied to payments made to Indian companies providing satellite services is currently set at 10 percent under section 194J of the Income-tax Act, 1961. Given the low-profit margins in the satellite sector, ISpA would like to recommend the government for a reduction in the withholding tax from 10% to 2% on payments made to Indian companies. This measure will help to enhance the profitability and sustainability of satellite operators.
- Extension of PLI to Space-grade Components
As self-reliance has been one of the key objectives behind opening the sector for private participation, ensuring journey towards self-reliance is focused on each value chain segment, is important. Drawing inspiration from the PLI scheme for drones, ISpA suggests introducing a similar scheme for space-grade components. This would incentivize domestic manufacturing under the ‘Make in India’ vision and bolster the supply chain for space-related technologies and attract investment by providing financial incentives to manufacturers based on their output.
- Government Commitment to Consume and Adapt NewSpace Sector
ISpA calls for a commitment from the government to procure and adopt space technology solutions across various governance areas such as agriculture, disaster management, infrastructure planning and development monitoring, urban development, and remote area connectivity. This would not only provide a stable market for space tech firms but also enhance the efficiency of public services.
In line with the above, a Digital Public Infrastructure (DPI) and Digital Public Goods (DPG) approach for Earth observation based geospatial analytics and insights can unlock value and innovation to several stakeholders well beyond the space sector. In line with previous budget announcements to create DPI for sectors, including agriculture, a budget announcement for a DPI/DPG for earth observation will pave the way for democratization of access to space technology.
- Reasonable Spectrum Usage Charges
The New Telecommunications Act 2023 has provisioned spectrum for satellite applications to be allocated through an administrative method, ISpA recommends reasonable Spectrum Usage Charges (SUC) as a percentage of Adjusted Gross Revenue (AGR) for satellite services allocated non-auctioned spectrum under the new Telecommunications Act, 2023. This would ensure that satellite operators are not overburdened with excessive fees.
- Depreciation on One-Time Fees and Licence Charges for Satellite Operators
Satellite service providers in India may be obligated to remit a one-time licence or spectrum fee to the government to secure the licence to deliver satellite services in India and an annual licence fee based on revenue. For the satellite sector, ISpA believes that a fairer approach would allow 25% depreciation of the one-time fee, treating the annual fee as revenue expenditure. This would lower taxable profits and optimize the tax impact, supporting business operations.
-
Jul 13, 2024 12:50 ISTExpectations from Electronics and Manufacturing Sector
Mr. Shishir Gupta, CEO of Riot Labz commented,
"As we approach the upcoming budget, RIOT LABZ hopes for increased government support for the electronics manufacturing sector. Enhanced incentives for research and development, along with subsidies for sustainable manufacturing practices, would significantly bolster our efforts to innovate and remain competitive globally. Additionally, streamlined regulatory processes and tax benefits for export-oriented units would facilitate smoother operations and expansion into international markets. We believe these measures will drive growth, foster technological advancements, and create more job opportunities within the industry. Furthermore, specific allocations for the development of skilled labour and upskilling programs would help bridge the talent gap, ensuring a steady pipeline of proficient workers to support our advanced manufacturing processes. We also hope for increased funding for infrastructure development in industrial hubs, which would improve logistics and reduce operational costs, enhancing overall productivity."