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Friday, 16 March 2018

Budget 2018 Provisions Escalating the Growth of Indian SMEs and MSMEs

After the two catastrophic policies: Demonetization (DeMo) and Goods & Services Tax (GST), the Indian economy was in an extremely unstable state. A lot of small and medium enterprises which carried out transactions in cash were affected, resulting in tremendous chaos and disorder in the business community. During the two years - 2016 and 2017, the unemployment escalated to an alarming rate; a lot of people lost their job, and the youth throughout the entire country were unhappy with the Modi government. Therefore, the business association was eyeing on Jaitley and his annual budget 2018 to bring some good news. To be honest, Mr Jaitley didn’t let his follower down.


Here are some major highlights of Budget 2018 in regards to the SME and MSMEs

1. Corporate tax reduction

In order to allow MSME/SMEs to invest more in expansion and employment creation, in the budget 2018, Arun Jaitley announced adjustments in the corporate tax. Earlier the corporate tax of 25% was only for corporations with annual turnover up to Rs 50 Crore. However, the same has been extended to organizations with annual turnover up to Rs 250 crore.
 
2. New funding sources for NBFCs

NBFCs got special recognition in the budget 2018, as an essential factor for the growth of the Indian Business and Trade sector. NBFCs were chosen to make adequate financial support under the Micro Units Development and Refinance Agency (MUDRA) Yojana, accessible to the non-corporate, non-farm small/micro enterprises operating in remote areas.

Therefore, necessary changes will be introduced in the existing scheme, emboldening NBFCs to offer Business loan on easier terms and conditions.


3. Encouragement to Online money lenders

During his speech, Arun Jaitley emphasised the role that online Fintech money lending companies can play in the growth of Indian Business and Trade sector. And thus, he announced the formation of a group of the financial expert within the finance ministry, who will govern and develop new ways to boost the growth of these companies. The end goal is to reach out and make MSME loans readily available to the indigenous masses. 

Bottom line: With these new policies, we hope the Indian Business and Trade sector progresses and contributes towards the Make in India Campaign.

Also Read : Budget 2018 And MSME: The Major Highlights Favouring The Growth

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