Budget 2021: What’s in it for SME
Finance Minister Nirmala Sitharaman presented the Budget FY 2021. This year Finance Minister has made a provision of Rs. 15,700 crore for the Micro, Small, Medium Enterprises sector. This year Nirmala Sitharaman has allotted just the double amount than the last year which was around Rs. 7572 Crore.Read more
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The Finance minister has also mentioned the predictable launch of the Atmanirbhar Bharat mission in the mid of 2021 that will aim to make India Self-sufficient.
Nirmala SItharaman suggested for a revision of Small companies definition as she has increased the threshold for paid-up capital from Rs. 50 lakh to Rs. 2 Crore and the turnover from Rs. 2 crore to Rs. 20 Crore which is expected to benefit more than 2 Lakh companies to simplify their compliance requirements.
Let’s move forward to some of the highlights of Budget 2021 for SME Sector.
Union Budget 2021
FM Sitharaman presented the first paperless budget in the parliament on February 1, 2021. In this budget FM has allotted Rs. 15,700 crore for the MSME sector. She has announced plenty of procedures to boost-up the Start-up and MSME ecosystems which were growing rapidly in the Pre-covid era digitally.
Nirmala Sitharaman also offered to reduce the requirements of margin money from 25% to 15% for startups as well as extended the tax claiming eligibility for one more year until March 31, 2022.
Encouraging One Person Companies
FM proposed to grow without any restrictions on paid-up capitals for OPCs. Sitharaman also allowed them to convert in to any other type of company at any time as well as reduced their residency limit for an Indian citizen to set up an OPC from 182 days to 120 days. FM also allowed NRIs to incorporate OPCs in India.
Finance minister as a means to ensure faster resolution of cases said that National Company Law Tribunal’s framework will be strengthened. Apart from this e-courts system will be executed and some alternate methods for the resolution of debt and a special framework for MSMEs will be launched.
Custom Duty Reduced
The government reduced customs duty to 7.5% on semis, flat and on long products like alloy, non-alloy and stainless steel to help MSMEs. Exempting duty has also been announced on steel scraps one year until March 31, 2022 in order to provide relief to metal recyclers in MSMEs. The FM also proposed an increment in duty from 10% to 15 % on steel screws and plastic builder wares.
Removed Exemption on Imports
The FM announced removing of exemption on imports of certain kind of leathers. Leather is produced domestically in good quantity and quality in MSMEs mostly.
Boost up Digital Payments
FM Sitharaman allotted Rs. 1500 Crores for a scheme. That scheme will provide financial incentives to promote the digital mediums of payment.
Industry sources haves pointed out this year’s budget as a help to revive from the disasters created from the last year’s pandemic and lockdown situation. As the lockdown restrictions are slowly relaxing the MSMEs are going to get benefitted from it.