Finance Minister Arun Jaitley has come up with major sops in much awaited Budget 2017-18. Stumbling under the after-effects of demonetisation, SMEs especially had their fingers-crossed when the FM began with the announcements. The 2 hours ticked swiftly once the Minister began strongly positioning sops for various sectors. From rationalizing tax rates to increase in fiscal deficit for MSMEs, the Budget read a lot. Here’s a take on the hits and misses of the Budget by industry veterans and SMEs:
Microsoft India President Anant Maheshwari: “The Finance Minister has presented a balanced budget, underlined by the continued push to using technology to aid a digital economy. As India strengthens its position on the global map, the need for skilled youth is crucial. I am glad to witness the increasing focus on cybersecurity, which is critical to securing the economy’s digital transformation. The reduction of corporate tax for MSMEs is a welcome move and will boost the economic growth. The momentum in the implementation of GST is promising and I look forward to seeing it unfold in the coming months.”
FICCI-CMSME Executive Member and Former NSIC Chairman Dr H P Kumar: “SME sector had high hopes from the Budget of which some (not many) have been fulfilled. Reduction in taxation rate and change in criteria of presumptive taxation limit are two welcome steps. Tax holiday for start-ups is also appreciable. The Budget had major focus on cashless economy and skill development, which is necessary, but employment creation requires setting up of small businesses to enthuse young generation. Digitisation improves the efficiency of MSMEs in formal sector on one hand but on the other hand, there is no favourable affect (instead has an adverse impact) on the informal sector which is labour intensive. Over-all the budget is a 7/10.”
Touchkin Founder Ramakant Vempati: “The tax reduction announced for SMEs under 50 cr is welcome, and will go towards mitigating some of the impact of demonetisation. In addition to incentives and the ban on cash transactions, there should’ve been more structured support for SMEs to help them go cashless e.g – a no-charge period for e-payments, fast-track approvals for internet banking and e-wallet setup, access to (or funding for financial intermediaries) so they can train their clients in going cashless. The other area could be higher pace of investments into fintech and other sectors via the venture capital community, supported by government funding under the Start-Up India policy. One big opportunity missed from our point of view is support towards IoT and AI in healthcare, which can improve and drive down cost of access for underserved communities.”
Jaipur Watch Company Founder Gaurav Mehta: “This seems to be a positive budget for us. There would be no immediate impacts but the future seems bright in the longer run. With the Government planning a boost for start-ups and GST playing a major role, this budget will be great for the watch industry in India. Demonetisation has surely affected people in one way or the other, but things are gradually coming back to normal. The import duty on Gold could reduce down from 10 per cent to 6-8 per cent. This move would be beneficial for us at Jaipur Watch Company as we specialize in creating Bespoke Gold Watches. Government has also indicated towards corporate income tax rate reduction from 30 per cent to 25 per cent over four years. This would lower the tax paid by JWC. Government could have planned something specific for the luxury segment market in India. On a scale of 1 to 10, this Budget is a good 7.”
Venture Catalysts Co-Founder Dr. Apoorv Ranjan Sharma: “Union Budget 2017-2018 is a progressive economy budget. The government has introduced the right policies, from reducing fiscal deficit gap to cleaner GDP growth, whilst promoting digitalization and growth of the rural sector. For the start-up economy, there is a significant relief in deductions within profit-linked available to seven years from the current five years. Furthermore, the deduction in corporate tax is a great boost for the companies with turnover of 50 crore or less. Besides, SMEs with turnover up to Rs 2 crore, will enjoy tax relaxation from 8% to now 6%. The move is going to waive off the financial burden, while propelling small merchants on their path to success.”
