The financial budget 2019 presented by the central government has brought about some much-needed relief to SMEs and MSMEs operating in India. After all, it’s been a tough couple of years for them, starting from demonetisation & the implementation of GST within a span of 6-8 months.
The budget outline for this year has proposed a 2 percent concession in interest rates on loans of Rs 1 crore or higher availed by MSMEs and SMEs which are registered under GST.
Additionally, government owned companies are now obligated to source at least 25 percent of their requirement from SMEs. Of this 25 percent, at least 3 percent should be sourced from SMEs owned & run by women entrepreneurs.
There’s more, businesses with less than Rs. 5 crore annual turnover, who make up for 90 percent of GST payers, can now file quarterly returns instead of monthly returns.
What Does This Mean for SMEs?
Functional small and mid-sized businesses in India can now avail quick loans for smaller amounts and get concession on bigger loans. This will help them, to an extent, in pursuing expansion plans and improving their operations. Furthermore, the government’s effort to level the playing field for SMEs by implementing the sourcing rule & help women entrepreneurs is certainly a welcome change to address the existing gender disparity in the Indian workplace scenario.
There were no policies or relief provided to start-ups in the budget, which remains a point of concern among many. Since this was an interim budget, we’ll have to wait and see if start-up issues are addressed in the budget 2019 introduced post Lok Sabha elections.
“The budget 2019 is an attempt to broaden the small & mid-ranged taxpayer base who weren’t filing returns earlier. Based on the announcements, the budget will have a far-reaching impact on banking & real estate sector,” said Akash Nangia, one of the founders of Techjockey.com.
The Road Ahead
The government is also working on a digital platform which will enable MSMEs to secure approval on loans of up to Rs 1 crore in 59 minutes. The biggest draw from this initiative is the government’s effort in making technology & digital solutions a mandate across the board. Which begs the question- if the government is encouraging digital India, why isn’t your business taking advantage of that? With the myriad of solution available across categories, it’s time you migrate & inculcate software solutions to improve your business functions and make smarter decisions.
If you’re ready to take the digital leap, head over to our category page and find software for every conceivable business process in existence.