Chennai: Though the Economic Survey wanted government consider the age factor while providing sops to MSMEs, the Budget continued to provide support to them irrespective of age by means of tax benefits and interest subvention.
The Economic Survey had mentioned that "perverse" incentives that are provided to micro, small and medium enterprises irrespective of their age are preventing them from growing large. It wanted the incentives to go to companies of less than 10 years of age and not those which are older.
However, the Budget did not take any step in this direction. "Small businesses constitute the backbone of our economy," it acknowledged.
Among the incentives, the budget allocated Rs 350 crore for FY 2019-20 towards two per cent interest subvention for all GST registered MSMEs on fresh or incremental loans. Further loans up to Rs one crore will be provided to MSMEs within 59 minutes through a dedicated online portal.
Government will also create a payment platform for MSMEs to enable filing of bills and payment. This will help eliminate the delays in the payment by government to suppliers and contractors. "Invest-ment in MSMEs will receive a big boost if these delays in payment are eliminated," he budget said.
The budget has contributed to three most important factors for MSMEs-ease of credit accessibility, greater security for small players through the pension offering and greater transparency as well as convenience in tax processes," said Alok Mittal, CEO & Co-Founder, Indifi Technologies
The government also decided to extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs 1.5 crore under the new Pradhan Mantri Karam Yogi Maan Dhan Scheme. Enrolment for the scheme will be kept simple requiring only Aadhaar and a bank account.
"Pension to traders on attaining the age of 60 years with Aadhar card is a proactive step which was a long pending demand of CAIT. The announcement of creation of a Payment platform for immediate payments for the supplies made to the government departments will encourage more capital flow in the market," said Praveen Khandelwal, Secretary General of Confederation of All India Traders.
