Budget 2022-23: MSME, Small Business & Manufacturing Sector Reactions

Here’s what the MSMEs, Manufacturing & Small Business market sector experts are saying about the Union Budget 2022:

Arun Poojari, Co-founder, Cashinvoice:

The Union Budget 2022 has acted as a booster shot for the MSME sector with an extension of ECLGS and an enhanced guarantee cover by Rs 50,000 crore. The proposed move will provide much needed credit for the recovery of small businesses and drive economic growth of the country. 

- Advertisement -
We further applaud the finance minister for introducing an end-to-end online e-Bill System for procurements by central ministries which will bring in enhanced transparency and help in reducing the delays in payments. The initiatives proposed are steps in the right direction to empower PM Modi’s ‘Digital India’ vision.”

Arvind Singhatiya,  Founder & CEO, LegalKart:

As per the union budget 2022, there have been no specific inclusions having a direct impact on the legal services but as far as the MSMEs are concerned, the central government has announced many concessions and schemes formulations to enhance the operation of legal services indirectly. The contracts for laying optical fibre in villages including remote areas will be awarded under Bharat net. This will increase the users of digital platforms and thereby, legal services operating digitally will have an indirect as well as a direct impact on its workings. 

Similarly, blending udyam, e-sharam, NCS & Aseem portals will help in enhancing entrepreneurialism and opportunities for small businesses. For startups fraternity specifically, the budget was in favour of  incentivising funding of the startups. It’s heartening to see the  capital gains exemption extended by another year.Kapil Bhatia, Founder & CEO, UNIREC:

By setting a perspective for the coming year, Union budget 2022 focuses on rallying the economy by ‘minimum government and maximum governance.’ Providing more attention towards the support of MSME, the government has announced the stimulus package in course of loans, long term funds and better cash flow for the ease of doing business and similarly, extension of fiscal and credit support will encourage this sector. For start-ups the tax concession period has been extended by one more year, Likewise, a 15% tax has been decided for the newly incorporated manufacturing units. This way MSMEs and startups will have an opportunity to withstand prolonged periods of uncertainty.

Sumit Agarwal, Head of MSE, Supply Chain & Financial Institutions, Jana Small Finance Bank:

Growth of MSMEs is crucial to India becoming a $5 trillion economy because 30% of our GDP is contributed by MSMEs.  The Union Budget provisions of extending ECLGS and announcing the launch of RAMP programme to provide more sustainable financing support to MSMEs, will help MSMEs significantly.

Arnav Mutneja, Founder, ZinQ Technologies:

“We appreciate the government’s move towards a design-led manufacturing scheme that goes a good way to support the ‘Make in India’ initiative and will enable 5G growth. This will increase business for electronic companies, also boosting the overall sector. Besides this, the scheme will also provide and promote research and development of technology and solutions and will enable affordable and innovative electronic gadgets. Additionally, the changes in customs duty rates will definitely improve the domestic manufacturing of electronics”.

Avinash Johri, Executive Director, Group India and SAARC Regions, CVTE:

The government’s unprecedented commitment to manufacturing has opened up a world of possibilities for us. The 2016 National Capital Goods Policy aims to double capital goods production by 2025, resulting in increased economic activity and job opportunities. We are very pleased that the design-led manufacturing scheme will be launched as part of the PLI Scheme to help build a strong ecosystem for 5G. We are delighted that reasonable tariffs will continue to support domestic industry and ‘Make in India’ without significantly impacting the cost of essential imports. In addition, Customs duty rates will be calibrated to provide a graded rate structure to facilitate domestic manufacturing of certain electronics products including electronics smart meters. This will allow for the production of high-growth electronic items in the country.

Ambarish Parekh, CXO, Paycraft:

Considering the challenges faced by the Indian economy in this pandemic, the Ministry of Finance has put up a fine balancing act. The Union Budget 2022 has various encouraging initiatives that will propel aspiring entrepreneurs and boost small businesses. The budget showcases a strong intent to continue driving a less-cash ecosystem considering the rapid growth in the Digital Payment sector, The Government has introduced 75 Digital banks across 75 districts to promote economical and user friendly payment gateways.

The government focuses on better infrastructure and technology for the Rail & Metro network and seamless experience for users will not only increase the digital footprint, but also the digital penetration. Government boost to MSME with credit support will enable the Fin-tech companies to enhance their product offering and continue building robust technology for Bharat.

Today’s Union Budget announcement acknowledged the MSME sector and the immense potential it holds for economic growth. The Budget has delivered on several of our expectations, and we look forward to seeing the implementation of these policy changes have a transformative effect on the growth of the MSME sector. While MSMEs have been on a strong recovery path since last year, many MSMEs are still rebuilding while adjusting to increased cost of raw materials.

Hardika Shah, Founder & CEO, Kinara Capital:

Two important schemes that can enable last-mile lending are CGTSME and ECLGS – it was a good move to revamp the CGTSME and provide extension for ECLGS until March 2023. By increasing the credit cover and relaxing participating criteria by CGTMSE programs, especially to qualified NBFCs focused exclusively on last-mile financial inclusion of micro-MSMEs, the schemes have the potential to go a long way in enabling the growth of the MSMEs.”

Pallavi Shrivastava, Co-Founder & Director, Progcap:

“The Union Budget 2022 can be rightly termed as ‘The Booster Budget’, which focuses more on revival rather than survival. The budget cascades huge hope to the MSME sector. With the extension of the ECGLS scheme and unification of the Udyam, E-Shram, NCS & Aseem portals, credit facilitation will become easier and the MSME sector will truly thrive through the medium of retail financing startups. We welcome the move by the government to boost and encourage the startup ecosystem by providing tax benefits and recognizing start-ups as “the growth drivers for India”. Government’s digital push towards promoting and establishing a ‘DigiTech’ India will clearly open the doors for financial inclusion and the fintech revolution.

Nishit Goel, Managing Director of Humsafar Diesel Door Delivery:

The Union Budget of 2022 announced by the government today is a welcome approach as it has drafted many things to boost investments in the country and the startup ecosystem overall. The eligibility of tax exemption claiming tax holidays for startups would be exempted till March 31st, 2023. We welcome this new move focusing on the MSME sector which would further boost the lower end of the spectrum. The new move can also lead to an increase in the demand for diesel door delivery startups. This would encourage budding micro entrepreneurs to come up in this segment. This had begun last year by introducing Fuelent, this would only further expedite it.

The government aims to create 60 lakh jobs in the MSME sector by 2023. This is where industries like ours can play a pivotal role in creating employment. We can pass similar benefits to our Fuelent and build an ecosystem around it.

Incentivising OPC Setup: In order to benefit startups in setting up one person companies (OPCs), Finance Minister Sitharaman announced OPCs to grow without any restrictions on paid-up capital and turnover. The Minister also allowed their conversion into any other type of company at any time and reduced the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allow NRIs to incorporate OPCs in India. We are hoping that with this the NRI are encouraged to invest in smaller set ups and if it happens it would be win win for both the parties.

Navin S. Rao, Co-Founder, The Kaftan Company:

As apparel manufacturers, we are continuously monitoring the various factors of production that impact us on a regular basis. We look forward to the implementation of the amended proposal for ‘The Technology Upgradation Fund Scheme’. This opportunity reduces external dependencies in terms of machinery and accessories procurement and as a result improves production efficiency with potential for further scalability. Newer technologies also factor in sustainable practices of production which plays a significant positive role within the apparel industry.

Palash Agrawal, Founder & Director, Vedas Exports:

The Union Budget 2022 is a very progressive and inclusive budget. We welcome the new announcements, especially from the manufacturing sector. The budget puts great focus on labor welfare. The government has allotted a huge amount towards the digital training of the laborer’s which is a great step forward. This means that the Karigars and artisans from various sectors will be hugely benefited and this would really bring in more skilled talents in the sector.

One class, one TV channel” program is a positive initiative announced which will provide education to those in need. It is the right step to provide supplementary education in all regional languages. This move will positively impact the literacy rate in India and improve overall well being of the country”

Ketan Patel, CEO, Mswipe:

Interlinking portals such as Udyam, e-shram, NCS and Aseem to improve credit facilitation for small business is welcome and it will push them to embrace entrepreneurship. Raising and Accelerating MSME Performance (RAMP) programme for MSMEs that is slated to be rolled out in the next five years will push a high number of technology companies to come forward with innovative solutions.

Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital:

Hon’ble Finance Minister today announced an encouraging set of measures, targeted towards rapid growth of the MSME sector and the economy. The extension of ECLGS scheme by Rs. 50,000 upto March 2023, with a special focus on ailing hospitality sector is crucial to facilitate its faster recovery. The credit support has also been provided in the form of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) revamp with credit of Rs 2 lakh crore for micro and small enterprises. These initiatives will help financial institutions to mitigate risk and stimulate credit outreach to MSMEs.

The Government also announced inter-linking of Udyam, e-SHRAM, NCS & ASEEM portals and providing services such as credit facilitation and entrepreneurial opportunities. This will certainly aid in the MSME sector’s formalization and growth. The Government has time and again shown distinctive support to the country’s MSME sector and encouraged its contribution to the Atmanirbhar Bharat imperative. The outlay of Rs 6,000 crore for programmes to accelerate MSME performance will surely assist in boosting the sector’s resilience and operational efficiency. Overall, the measures announced in Union Budget 2022-23 will unlock rapid recovery and holistic growth of the MSME sector.

George Alexander Muthoot, Managing Director, Muthoot Finance:

The 2022-23 budget has laid clear emphasis on prioritizing economic growth with focus on capital spending to generate growth and employment. The announcement relating to MSMEs and thrust on digital banking will further go a long way in supporting the economy. The MSME sector has been one of the most impacted during the pandemic. Focusing on further supporting the MSME sector and reducing stress in this segment, the Government has widened the ECLGS scheme & revamped CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises).

The ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore. The CGTMSE scheme will be revamped with required infusion of funds. This will facilitate additional credit of Rs 2 lakh crore for MSMEs and expand employment opportunities. We believe that the NBFC sector will also benefit from the allocation of Rs. 48,000 cr (under the PM Awas Yojana) for affordable housing unveiled by the honourable Finance Minister during the budget announcement. This move will accelerate the credit demand in the economy and positively affect the performance of NBFCs catering to the sector.

Manish Bansal, Director, Window Magic:

Overall it’s a neutral budget and nothing much has changed. However, there is positivity from the government budget. The government is giving a lot of emphasis to digitalization in every aspect be it crypto currency being recognized and e-passport. Whereas MSME  and a business owner are concerned, there is no change in tax though there was an expectation of change in taxes to support the MSME. However, ECLGS has been a boon for MSMEs in the pandemic, and this extension and the increase in allocation is a great move. This also might help the overall economy once there is a good cash flow.

Sumana Iyengar, CEO & Co-Founder, Goavega Software Pvt. Ltd:

The initiatives to widen the scope of portals meant to support MSME’s is a good move, and in combination with the ‘One Nation, One Registration’, it will help in ease of doing business. However, while the ECLGS will be extended till March 2023 and its guarantee cover will be expanded by Rs 50,000 cr to total cover of Rs 5 lakh crore, several MSME’s and start-up’s like us, who seek support in terms of tax benefits and access to low interest rates for business loans, have little to look forward to.

On the other hand, the announcement of the 5G spectrum auction in 2022 to roll out 5G services across India and defined timelines to laying of optical fibre in villages by 2025, is definitely a big boost to the IT services sector as it will help accelerate innovation and make it more financially accessible to businesses. Steps to further enhance financial technology infrastructure is another positive step towards strengthening the overall digital infrastructure in the country, laying the strong foundation for a tech enabled economy.

Publication : TechGraph

Author : Krishna Mali

Source link: 

Read latest Business News and Startup news on TechGraph. Watch live and latest news on TechGraph TV. Follow us on Facebook or follow us on Twitter and Instagram. Listen audio news from TechGraph Briefings on Spotify, Google Podcast, Amazon Music & on Apple Podcast.
February 06, 2022 — Techgraph | Krishna Mali