Union Minister Kalraj Mishra said announcements like the lowering of income tax for smaller firms and doubling the lending target under MUDRA Yojana will benefit small entrepreneurs in the country. Observing that smaller firms had “faced difficulties” post demonetisation, Mishra told PTI that the move to slash income tax for firms having turnover up to Rs 50 crore will provide a “big relief to the MSME sector”. Mishra said the announcement to double the lending target to Rs 2.44 lakh crore under the Pradhan Mantri Mudra Yojana for 2017-18 will immensely benefit the small entrepreneurs.
The minister said the government’s thrust on skilling youth and enhancing their employability potential will provide a skilled workforce to the micro, small and medium enterprises. SupportBiz comprises a list of the immediate reactions by the MSME associations on the union budget passed by the union government.
MSME sector is welcoming the notifications mentioned in the union budget. For the MSMEs, the two major steps are the 5% releief in tax for the companies with turnover less than INR 50 cr. It was earlier 30%. Another aspect is MSME companies whose turn over below INR 2cr is now 8% tax against the earlier 6%. The association feels that it will encourage the employment and new suggested. Raliway is coming out in stock-e.
This budget would tremendously strengthen the economic muscle of the country. It is directionally correct, fiscally prudent and strengthens the governance fabric of the nation. FICCI compliments the Finance Minister on his vision for the economy which alongside economic growth also ensures economic justice. Growth without inclusion can be a liability for the country.
FICCI had represented to the government for bringing in such measures that will enhance transparency in line with the tenets of good governance. I give full marks to the government for this bold and pragmatic measure”,
Federation of Indian Export Organizations
The budget has drawn a road map for bringing economy back on track and accelerating it in medium term. The investment of close to Rs.4.00 lacs crore in the infrastructure encompassing road, railways, aviation would not only improve competitiveness of manufacturing and exports sector but would reduce the logistics cost of exports as well. The MSME sector with a turnover of upto Rs.50 crore will get a boost with reduction in income tax, while SEZs may draw a consolation in carry forward of MAT from 10 years to 15 years.
Post demonetisation, rural landscape had come under stress along with the SMEs and the informal sectors of the economy and needed a boost. Credit commitments of Rs 10 lakh crore for farm sector along with several initiatives for helping agri-produce to get better prices are the initiatives which would be a growth driver for the agricultural sector besides favourable weather conditions and good Monsoon in 2016.
Abolition of the Foreign Investment Promotion Board is a great signal to the foreign investors about furthering of reforms and ease of doing business in India. A boost to the digital economy by way of stepping in telecom infrastructure would bring in more transactions in the formal sector.
However, he said while the reduction of corporate tax for the small and medium enterprises with turnover less than Rs 50 crore, is a welcome move, the India Inc was expecting it for large firms as well. At least the glide path towards lower corporate tax is clear; so is the case with the personal income tax, even though the relief is limited to those earning up to Rs 5 lakh.
All in all, it is no-frill and business like Budget that is high on capital expenditure spend, doing away with the plan, non-plan distinctions. With advancement of the Budget presentations and early passage by Parliament, the quality of the government expenditure would improve as well.
Indian Chamber of Commerce (ICC):
We welcome the push to boost infra development, MSME tax reductions and personal income tax reforms. The chamber also praised the move to go for political funding reforms and reforms in FDI.
Announcements that the maximum amount a political party can receive in cash donation will be Rs. 2,000 from any one source, and that political parties will be entitled to receive donations by cheque or digital mode are welcome steps that will make political parties more transparent and accountable,”
The Southern India Chamber of Commerce & Industry (SICCI):
The announcement of reduction of tax for MSME and also the reduction of tax rates for individual having taxable slab between ₹2.5 lakh and ₹5 lakh from 10% to 5% is a good move.
Cochin Chamber of Commerce:
The Cochin Chamber is of the view that the Budget presented by the Finance Minister is one that has a long term vision. The allocations for infrastructure, digitisation, skill development and public health will have positive long term effects for the country. The announcement in the Budget that the total allocation for rural, agricultural and allied sectors for 2017-18 is Rs. 187223 crore, which is 24% higher than last year is a positive move. Furthermore, the allocation under MNREGA has been increased to 48,000 crore from Rs. 38,500 crore. We appreciate the allocation of Rs. 3,96,135 crore for infrastructure development.
We especially laud the decision to reduce the tax for small firms with turnover up to Rs. 50 crore to 25% tax from 30%. However, we had hoped that there would be a reduction in Corporate Tax across the board. While the decision to reduce income tax rate from 10% to 5% for the tax slab of Rs. 250,000 to Rs. 500,000 is welcome, a comprehensive tax rationalisation would have been a relief to all.
The announcement regarding the abolition of the Foreign Investment Promotion Board (FIPB) should definitely improve the ease of doing business in India.
Madras Chamber of Commerce and Industry:
The manufacturing sector, including the auto sector, did not get its share of attention in the budget. Its president Ram Venkataramani, said, “Not enough encouragement given to R&D and Innovation, which are keys to future growth. A ‘Scrappage Policy’ for old polluting vehicles would have helped stimulate growth in the auto industry.