Budget 2024
New measures announced for MSMEs
New assessment model for MSME credit by PSBs: This marks a significant departure from traditional credit assessment methods based solely on assets or turnover, likely offering substantial improvement in credit eligibility across most units, including MSMEs without formal accounting systems,” stated the Finance Minister.
MUDRA loans enhanced to Rs 20 Lakh: The proposal includes raising the Mudra loan eligibility limit from Rs. 10 lakh to Rs. 20 lakh for entrepreneurs successfully repaying loans under the ‘Tarun’ category.
Credit Guarantee Scheme in Manufacturing Sector: Furthermore, a credit guarantee scheme is being proposed to facilitate term loans for MSMEs to purchase machinery and equipment, without requiring collateral or third-party guarantees.
New SIDBI branches In MSME clusters: SIDBI plans to establish new branches within three years to extend its reach and cover all major MSME clusters. This year alone, 24 new branches will open, increasing service coverage to 168 out of 242 major clusters.
New multi-product food irradiation units in MSME sector: In addition to financial support for setting up 50 multi-product food irradiation units in the MSME sector, the Union Budget announced the establishment of 100 food quality and safety testing labs accredited by NABL.
Turnover threshold for buyers halved for mandatory on boarding in TReDS: The budget has reduced the threshold for mandatory TReDS platform adoption to Rs. 250 crore, down from Rs. 500 crore. expected to onboard 22 more Central Public Sector Enterprises (CPSEs) and 7,000 additional companies onto the platform.
E-commerce export hubs: The Finance Minister also proposed setting up E-Commerce Export Hubs in public-private partnership mode, akin to SEZs, to provide comprehensive trade and export-related services under a unified regulatory and logistic framework.
Here are some sectors on which government focused majorly which will directly and indirectly give boost to the MSMEs.
Infrastructure Spending:
The spending on roads & allied infrastructure is consistently enhanced year on year. In current budget the allocation is as high as ₹11 lakh crores. Which is more than 36,000 crores additional from previous year. It will surely create big boost in overall demand in economy thereby creating higher opportunities for businesses (incl. small & medium enterprises).
Industrial Parks
Twelve new industrial parks are proposed to be set up under the National Industrial Corridor Development Program. These shall provide ready infrastructure for industrial clusters in planned manner for creating new job opportunities.
Innovation, Research & Development
₹1 lakh crores allocated for innovation, research & development of new technologies / products. This will help in achieving the manufacturing strength with new products with global acceptance thereby strengthening “Make in India” initiatives.
PM Awas Yojana Urban 2.0
10 lakh crores allocated for PM Awas Yojana Urban 2.0 to complete the requirements of affordable housing to improve the overall quality of living & development of middle class segment to boost in economic demand.
PM Surya Ghar Muft Bijli Yojana
Almost 1 crore household will be benefited from rooftop solar installations subsidy which will boost the availability of affordable power for common man & reduce the burden on electricity grids to enhance supply in industrial clusters.
Women Empowerment
More than ₹3 lakh crore has been allotted to schemes for women and girls. This will enhance the overall growth in economy on wider base along-with rapid development in the arena of gender equality and women empowerment.
The Moot Point :
It is evident from this huge spending initiatives will drive consumption & drive more demand for goods & services. Thereby directly create more opportunities for businesses.
Experts’ Views On Budget 2024:
Reuter Said: “India keeps infrastructure spend target unchanged at record 11.11 trln rupees for 2024-25”……… “The government has doubled spending on infrastructure over the past three years as a way to boost the economy. As a percentage of GDP, longer-term capital expenditure has risen to 3.4% in the current year from 1.7% in 2019-20.”…..
Business Standard: Budget 2024 has taken various measures to make India lucrative for all domestic and international investors which should foster the concept of ease of doing business in India. One of the biggest steps taken in this direction is the abolition of Angel tax.
Dinesh Khara, chairman, SBI: The thrust to agriculture productivity, infrastructure, climate transition and rationalization of capital gains taxation regime are the deeper facets of the transformation that Budget seeks to achieve. From banking perspective budget is pro-growth and offers scope for balance sheet expansion…….