New Delhi : Federation of Indian Micro and Small & Medium Enterprises (FISME) has found the Union Budget announced on Wednesday as growth oriented and inclusive.
The industry body representing MSMEs has credited the Union Finance Minister Nirmala Sitharaman for creating a financial balance between the need of enhanced capital expenditure and fiscal discipline to push for sustained economic growth.
“Given the constraints of global upheaval and lingering post Covid supply chain disruptions, the FM has maintained the balance,” said FISME.
Welcoming the key announcements for MSME sector, the MSME body said that it will ensure the sector’s growth and reduce pain.
Firstly, infusion of Rs 9000 crore to Credit Guarantee Fund will be leveraged to facilitate flow of collateral free funds to the tune of Rs 2 lakh crore to MSMEs. With the back of the Guarantee, the cost of funds also may come down by 1 per cent.
Reflecting on the support proposed for MSMEs in timely receipt of payments, FISME said it is creditworthy that the Finance Minister has been able to make everybody happy without being populist.
“The FM has proposed that deduction for expenditure incurred on payments made to MSMEs will be allowed to their buyers only when payment is actually made. Which means, buyers cannot claim deduction without first paying to MSMEs. It will force them pay in time,” it added.
The Budget further proposes to bring relief to large number of Government MSME suppliers who were inflicted penalties or their Bank Guarantees were forfeited as the world was adversely affected during Covid. Now, 95 per cent of forfeited amount is proposed to be reimbursed.
To the government suppliers another proposition could also spell relief. Budget announces that ‘to settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardized terms will be introduced’. Graded settlement terms are being worked out depending on pendency level of the dispute.
Moreover, up to a turnover of Rs 3 crore, small businesses need not go for statutory audit. The caveat is that their cash receipts are not more 5 per cent.
Earlier the limit was Rs 2 crore. A similar relied is proposed to professionals and their limit is increased from Rs 50 lakh to Rs 75 lakh.
Besides these measures, there are several forward looking initiatives announced in Budget such as setting up of a National Financial Information Registry which would help generate robust information system and help MSMEs access loans.
Common Universal Identifier for businesses proposed in the budget will also rid MSMEs of the need for having multiple identities.
A new initiative of PM VIshwakarma Kaushal Samman (PM VIKAS) will help artisans integrate the MSME value chain.
