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Impact of Budget 2022 on MSME and Tax Benefits for MSME The Union Budget 2022-23 seems to not just prioritize the revival of MSMEs but also give the sector much-needed financial support to the sector. It lays down the foundation of a long-term macro-economic vision for the MSME sector and is centered at the development of infrastructure, thus making the startup India digitalize. From PM Gati Shakti's initiative to extending credit support for MSMEs through the ECGLS scheme, the Budget looks to provide the framework for inclusive growth. Let us see how this Budget will help to create an impact in the MSME sector through this article. Definition of MSME For Micro Enterprises: Microenterprises are manufacturing and service businesses with a capital investment of less than Rs 1 crore and a turnover of less than Rs 5 crore. For Small Enterprises: The investment and turnover thresholds for small businesses have been raised to Rs 10 crore and Rs 50 crore, respectively. For Medium Enterprises: Medium businesses are those with a capital investment of up to Rs 50 crore and a revenue of up to Rs 250 crore. Know More: MAJOR IMPACT OF UNION FINANCE BUDGET 2022 – 2023 Emergency Credit Line Guarantee Scheme (ECLGS) Over the next five years, the government has also planned to roll out Rs 6,000-crore-worth under the Emergency Credit Line Guarantee Scheme (ECLGS), to benefit over more than 130 lakhs MSME until to March 2023. Additionally, the guaranteed cover amount will be expanded by an additional amount of Rs 50,000 crores earmarked for Hospitality and related enterprises, making a total cover of Rs 5 lakh crore. Steps towards digitalizing India India’s MSME sector is also supporting a high degree of digitization among the startups in India; by interlinking UDYAM, e-SHRAM, National Career Service (NCS), and Aseem portals with an intent to provide live organic databases providing G2C, B2C, and B2B services, such as credit facilitation. For the promotion of the development of home-grown digital infrastructure in the country, a DESH-stack e-portal will be launched for educating and upskilling young entrepreneurs. In an attempt to push the growth of the farmers further, the Centre promotes the use of Kisan Drones to spray pesticides and nutrients on their crops at an affordable rate. The government will hire some governmental agencies who can buy the drones and rent them to farmers at a rate up to Rs 350 for spraying in an acre of land. Agricultural and Rural Development In order to promote agricultural and rural enterprises, a fund with blended capital will be facilitated under the co-investment model will be through NABARD. The government will also promote chemical-free natural farming, as well as public-private partnerships to ensure access to digital services is delivered to farmers across the country. Raising and Accelerating MSME Performance (RAMP) Further to this, Raising and Accelerating MSME Performance (RAMP), will be launched by the government of India which will be part of a Post COVID Resilience and Recovery Programs (MCRRP) with a special focus on the revival of the MSME sector from post-COVID effects, thereby resulting in them into the sustainable growth of the economy. Promotion of Steel and related products enterprises In order to provide relief to the MSME secondary steel producers, certain anti-dumping and countervailing duties on coated steel flat products, stainless steel, and bars of alloy steel were repealed for the sake of public interest considering prevailing high prices of metals. On the other hand, an exemption to parts of umbrellas stands withdrawn and the duty imposed on the trading umbrellas is raised to 20 percent. The Finance Ministry has also proposed to extend the tax holidays to offer tax incentives to more entrepreneurs in the country. Eligible start-ups who are incorporated before March 31, 2022, had been provided a tax incentive for three consecutive years out of ten years from incorporation. Also, entrepreneurs who are starting their ventures until the end of March next year will be eligible to claim this tax incentive. The union budget had also reduced the corporate tax rate of 15 percent for newly incorporated manufacturing companies by one more year is from 31st March 2023 to 31st March 2024 under section 115BAB.

budget 2022

Impact of Budget 2022 on MSME

Sector-wise detailed measures implemented by Union budget 2022

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