On February 1, 2023, Finance Minister presented the Union Budget 2023. The Minister primarily highlighted four key initiatives to help MSMEs during this fiscal year, with others aimed to aid MSMEs as well as other enterprises. One of the most significant announcements is the redesign of the CGTMSE program. The present article is on MSMEs Announcements in the Union Budget 2023-2024.
MSMEs Credit Guarantee
The CGTMSE for MSME will be redesigned; this is another important statement for the MSME Sector in the Union Budget 2023-2024.
Credit guarantee trust for small microenterprises plan would be overhauled with a Rs 9,000 crore investment, commencing April 1, 2023.
It significantly assists MSMEs by facilitating extra financing of Rs 2 lakh crore for MSMEs, lowering credit costs by 1%, and creating job prospects.
This declaration was made in the budget for 2022. The sum, however, was not disclosed. This overhaul included changes to the CGTMSE scheme in December 2022.
Making additional micro units available for presumptive taxation
MSME is our economy’s growth engine. Micro-enterprises with a revenue of up to Rs.2 crore and professionals with a turnover of up to Rs.50 lakh were formerly eligible for the presumptive taxation plan. The Union Budget 2023 increased the restrictions for taxpayers with less than 5% cash revenues to Rs.3 crore and Rs 75 lakh, respectively. To assist MSMEs in receiving payments on time, the FM has also recommended allowing a deduction for expenses expended on payments only when the payment is made.
Taking care of the payment problem
To assist MSMEs in receiving timely payments, the Union Budget 2023-2024 recommended deducting expenditures on payments made to them only when payments were made to them by purchasers.
This means that purchasers cannot claim a conclusion until they first pay MSMEs. The move is likely to compel buyers to pay off small firms‘ debts as soon as possible.
MSMEs can benefit from the Vivad Se Vishwas Scheme.
According to the Union Budget 2023-2024, MSME suppliers that are unable to complete contracts due to the Covid-19 epidemic will be reimbursed by the government for 95% of their lost sums.
The Vivad se Vishwas plan announced this alleviation measure. This plan is a voluntary endeavour of the government to resolve ongoing direct tax issues with taxpayers in a friendly manner.
Due to COVID-related issues, people who do not have access to institutional finance and whose cash has been frozen as a bid fee or performance guarantee would benefit from the effort.
DigiLocker Entity
FM stated that an entity named DigiLocker will be established for MSMEs, in addition to prominent corporate and charity trusts, for securely storing and exchanging documents online with various regulators, banks, authorities, and other business organizations as needed.
Digital Skill India Platform
FM recommended building a single Skill India digital platform while presenting the Union Budget 2023. This platform will concentrate on the following topics:
Providing formal skilling depending on need.
Making connections with employers, particularly MSMEs
Increasing access to entrepreneurial programs.
Package PM-VIKAS for makers and craftspeople
While presenting the Union Budget 2023-24, Finance Minister Nirmala Sitharaman proposed a package of aid for artists and craftspeople.
The newly designed Pradhan Mantri Vishwakarma Kaushal Samman (PM-VIKAS) plan would assist artisans in increasing the quality and reach of their goods by integrating them into the value chain of Micro, Small, and Medium-scale Enterprises. The Minister emphasized some of the most important aspects of the new system.
- Advanced skill instruction is available.
- Financial assistance
- Promotion of a brand
- Understanding of new digital techniques and effective green technologies
- Connection to local and global markets
- Electronic payments
- Social safety net.
What is MSME? – An Overview
MSME is a short term that is used for micro, small, and medium enterprises. According to the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, entities are divided into two different divisions/categories.
- Manufacturing enterprises – businesses that manufacture or produce things in any industry.
- Service enterprises are those that provide or deliver services.
Characteristics of MSMEs
Here are some of the key characteristics of MSME registration.
- MSMEs are well-known for providing fair support to firms seeking enhanced access to local and export markets.
- MSMEs help businesses with product creation, design innovation, intervention, and packaging.
- MSMEs advocate for the advancement of technology, infrastructure, and the overall modernization of the industry.
- MSMEs provide job possibilities and financing.
- MSMEs give credit limits or financial assistance to various banks around the country.
MSMEs’ Role in the Indian Economy
In projecting the Indian economy, the MSME sector has shown to be a highly dynamic element. MSMEs have aided in the growth and development of many product categories and industries since they create and manufacture a wide range of items for both local and international markets.
MSMEs have played a critical role in creating job possibilities in underserved communities. They have contributed to the development of such places at a lower capital cost than major enterprises in cities.
MSMEs have also contributed and played an important part in the country’s growth in several areas such as the need for minimal investment, operational flexibility, a low rate of imports, and a large contribution to local output.
Conclusion
In India, any business or enterprise that falls under the category of micro, small, or medium-sized enterprises (MSME) can apply for MSME registration online. The eligibility criteria for MSME registration are based on the investment made in plant and machinery or equipment for manufacturing or service enterprises. MSME registration offers several benefits to businesses, such as easy access to credit, tax exemptions, and government subsidies, among others.
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So, if you are looking to register your business under MSME, get in touch with Kanakkupillai today and give your business the boost it deserves!
