New Delhi [India], Feb. 2 (ANI-BusinessWire India): Union Budget 2017-18 covered a large breadth of topics and touched upon variety of subjects and issues, making it a transformational budget for India.
Having said that, the budget could have been better had the government focused on more number of initiatives announced per industry, to give the budget more depth and make it more valuable for all industries, especially for manufacturing and MSME sector, said R.Narayan, Founder and CEO, Power2SME.
"The General Budget 2017-18 made some important sector specific announcements for MSME sector. The reduction of income tax rate to 25 percent (from the existing 30 percent) for smaller companies within an ambit of Rs.
50crore turnover has been announced. This 5 percent tax respite will make a huge difference in the revenue chains of the MSMEs," said Narayan.
Other measure targeted towards MSMEs focus on the businesses with turnover up to Rs 2 crore and for them, a reduction has been announced in the existing rate of deemed profit of 8 percent under section 44AD of the Income Tax Act to 6 percent in respect of the amount of total turnover or gross receipts received through banking channel / digital means.
Additionally, the government's decision to double the lending target of banks under MUDRA Yojna to Rs.
2.44 lakh crores will further boost the financial morale of the MSME sector. By altering the taxation policies and improving lending facilities, the government aims to provide a level playing field to MSME players and will also give the much needed boost to the MSME sector.
Also, the finance minister has announced a fiscal deficit target of 3.2 percent for the financial year 2017-18 up from the goal of 3 percent set earlier, which will give more flexibility to RBI to bring down the interest rates.
In continuation of its (government's) aim to make India a global manufacturing hub, the government has further announced to increase the allocation and incentives of schemes like M-SIPS and EDF to Rs745 crore for electronic manufacturers in India.
On the other hand, FM also announced that increased digital transactions will help MSMEs with easy access to formal credit.
All these moves clearly re-emphasise the government's focus on its flagship campaigns Make in India and Digital India.
"India has already moved up in the value chain, as the 6th largest manufacturing country from its previous 9thposition.
Today's budgetary announcement will further strengthen the growth story," Narayan added. (ANI-BusinessWire India).