The Union Budget 2022-23 has been announced by the Finance Minister, Nirmala Seetharaman on 1st February. Mentioned here are the points related to MSMEs, Small Businesses, and Start-Ups.
Budget 2022 For MSMEs – More Credit Availability, Focus on Skill Improvement
- MSMEs, UDYAM, e-Shram, NSS, ASEEM websites will be interlinked. They now cover live organic data providing G2C, B2C, and B2B services.
- The services provided by the websites will be related to credit facilitation, skilling and recruitment with an aim to further formalise and enhance entrepreneurial opportunities for all.
- The Emergency Credit Line Guarantee Scheme (ECLGS) has provided additional credit to more than 130 lakh MSMEs to mitigate the adverse impact of the pandemic.
- Considering some MSMEs, like hospitality and related services, that are yet to regain their pre-pandemic level of business, the ECG and ECLGS will be extended up to March 2023. Its cover will be expanded by INR 50,000 Cr to a total cover of INR 5 lakh Cr. The additional amount will be reserved exclusively for hospitality and related services sectors.
- The Credit Guarantee Trust for MSMEs, the CGTMSME scheme, will be funded with the required amount to facilitate additional credit of INR 2 lakh Cr for MSMEs and to expand employment opportunities.
- The Racing and Accelerating MSME Performance, RAMP program, with an outlay of INR 6,000 Cr over 5 years will be rolled out to help the MSME sector to become more efficient, competitive and resilient.
- Skill improvement programs in partnership with industry will be reoriented to promote continuous skilling avenues, sustainability and employability. The national skill qualification framework will be aligned with dynamic industry needs.
Logistics and Infrastructure Development to Support SMBs and MSMEs
- PM Gati Shakthi Master Plan is a transformative approach for economic growth and development. It is driven by 7 engines
- Mass transport
- Waterways and
- Logistics infrastructure
Development projects of all these engines will be announced soon and the same will lead to huge employment and entrepreneur opportunities for all, especially for youth.
The scope of the master plan will also provide economic transformation, seamless multimodal transport and logistics efficiency.
- Railways will develop new products and efficient logistics services for small and medium enterprises (SMEs) and small farmers.
- Besides taking the lead in the integration of postal and railways networks to provide seamless solutions for the movement of parcels.
- ‘One Station, One Product’ concept will be popularised to help local businesses and supply chains.
- In the next 3 years, 100 PM Gati Shakthi cargo terminals for multimodal logistics facilities will be developed.
Incentives for Start-ups
- Eligible start-ups established before 31st March 2022 had been provided with a tax incentive for 3 consecutive years out of the 10 years from incorporation. In view of the pandemic, the period of incorporation of the eligible start-ups is extended by one more year up to 31st March 2023 to provide such tax incentives.
Incentives for Newly Established Manufacturing Companies
- To establish a globally competitive business environment for certain domestic companies, a concessional tax regime of 15% was introduced for newly established domestic manufacturing companies. The current budget extends the last date for commencement of manufacturing or production by one more year i.e., from 31st March 2023 to 31st March 2024.
Customs Duty Reduction for MSMEs, Electronics, Gems, and Chemicals
- For MSMSes
- Customs duty on umbrellas has been increased to 20%, while the exemption to parts of umbrellas is being withdrawn
- Duty exemption has been rationalised on agricultural tools manufactured in India
- Duty exemption given to steel scrap has been extended for another year to provide relief to MSMEs secondary steel producers.
- Certain anti-dumping and CBD on stainless steel and coated steel flat products, bars of alloy steel has been revoked considering prevailing high prices of metals.
- To incentivise exports, exemptions are provided on items such as embellishment, trimmings, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes, that may be needed by bonafide exporters of handicrafts, textiles, leather garments, leather footwear, and other goods.
- Electronics: To facilitate domestic manufacturing of high growth electronic items like wearable devices, hearing devices, and electronic smart meters, customs duty concessions are given to parts of transformers of mobile chargers and camera lenses of mobile camera modules and certain other such items.
- Gems and jewellery: Customs duty on cut and polished diamonds and gemstones is reduced to 5%. Simply sawn diamond would attract no customs duty. By June 2022 a simplified regulatory framework shall be implemented to facilitate the export of jewellery through online portals.
To dis-incentivise the import of undervalued imitation jewellery, the customs duty of at least INR 400 per kg is imposed on its import.
- Chemicals: Customs duty on certain critical chemicals like methanol, acetic acid, heavy pet stocks for petroleum refining are being reduced. On the other hand, customs duty on sodium cyanide has been raised as the chemics has adequate capacity in the domestic market.