Mumbai: The Finance Minister Nirmal Sitharaman has proposed an outlay of Rs 15,700 crore in 2021-22 budget against Rs 7,572 crore in 2020-21 budget micro, small and medium enterprises (MSMEs), which were hit hard due to coronavirus pandemic led lockdown and economic slowdown.
We have taken a number of steps to support the MSME sector in this Budget. I have provided Rs 15,700 crore to the sector more than double of the last year,” she said. FM said the definition of small companies will be revised by raising the capital base to Rs 2 crore from the current limit of Rs 50 lakh, and the turnover of those companies is between Rs 2 crore and Rs 20 crore. This is expected to benefit two lakh companies in easing their compliance requirements.
FM has announced reduction in Customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels to help MSMEs and other user industries that have been severely hit by a recent jump in iron and steel prices. Sitharaman also proposed exempting duty on steel scrap for a period till March 31, 2022 to provide relief to metal recyclers, mostly which are MSMEs.
The Finance Minister further proposed an increase in duty from 10% to 15% on steel screws and plastic builder wares to benefit the MSMEs. She has also proposed the withdrawal of exemption on imports of ‘certain’ kinds of leathers as they are domestically produced in good quantity and quality, mostly by MSMEs.
Gati Ltd Chief Financial and Transformation Officer Rohan Mittal said fund infusion of Rs 15,700 crore for MSMEs, increasing import duty on products will help promote manufacturing that will further act as key enablers for growth for the economy. Furthermore, Khatabook Co-founder and CEO Ravish Naresh asserted that the MSME sector has been granted a much needed boost as small businesses make progress on their road to recovery, notably through the proposed doubling of their allocation.
“Financial inclusion through digital inclusion is the need of the hour and will set the tone for the coming years, hand holding businesses through transition period. GST and compliance, an exacting task for the MSME sector formerly, will now be simplified by reducing inverted duty structures, further amplified through digital filing,’’ Naresh noted.
The definition of small companies will be revised by raising the capital base to Rs2 crore from the current limit of Rs 50 lakh, and the turnover of those companies is between Rs 2 crore and Rs 20 crore.
An increase in duty has been proposed from 10% to 15% on steel screws and plastic builder wares to benefit MSMEs.