Union Budget 2024 a boon for MSMEs: Expert

The Union Budget 2024 exemplifies strategic foresight and sound economic planning, setting the stage for a new era of growth, innovation, and social advancement. Highlighting the critical role of Micro, Small, and Medium Enterprises (MSMEs) in India’s economy, the budget aims to support and empower this sector, recognising its significance in driving growth, fostering innovation, and generating employment opportunities. Various initiatives have been implemented to address the challenges faced by MSMEs and help them thrive in a competitive global environment, stated Dr PS Biswa Bhusan Sahoo, Assistant Professor at SRM University – AP.
Dr. Sahoo emphasised the substantial increase in credit allocation for MSMEs as a standout feature of the budget. A major announcement was the establishment of a dedicated MSME Credit Guarantee Fund, which will provide collateral-free loans to eligible enterprises. This initiative is expected to significantly ease the financing difficulties faced by small and medium-sized businesses, encouraging more entrepreneurs to explore opportunities within the MSME sector. The government has set an ambitious target of offering Rs 100 crore in collateral-free loans to MSMEs through this fund.
He also noted that the budget introduces various tax incentives and measures to support MSMEs. Notably, MSMEs with annual sales of up to Rs 250 crores will see their corporate tax rates reduced from 25% to 20%. Additionally, streamlined tax compliance processes are expected to reduce the time and cost of filing returns by 30%. The tax holiday for start-ups has been extended by three years, expected to benefit around 10,000 start-ups. These measures are designed to improve the ease of doing business for MSMEs and enable them to focus on growth and expansion.
The budget allocates Rs 5,000 crores for skill development and capacity-building initiatives within the MSME sector. This includes establishing dedicated centres in every district, collaborating with industry associations and academic institutions to design customized training programs for 500,000 MSME employees, and offering incentives for MSMEs to invest in employee training and upskilling, targeting the training of 2 million workers. By prioritizing human capital development, the government aims to enhance the competitiveness of MSMEs and ensure a skilled workforce that can adapt to the evolving business environment.
Further initiatives include providing subsidies to 100,000 enterprises for cloud-based ERP solutions, establishing a National MSME Technology Upgradation Fund with Rs 1,000 crores to facilitate access to advanced technology, and forming partnerships with leading technology companies to offer training and mentorship to 50,000 MSMEs.
This comprehensive approach to supporting MSMEs in the Union Budget 2024 is poised to create a robust foundation for their growth, positioning them as key drivers of India’s economic progress