With the Union Budget 2025 just days away, all sectors are keenly looking forward to the crucial speech on February 1. The country's finance minister Nirmala Sitharman will be presenting her record 8th budget.
When it comes any economy, the role small and mid-scale enterprises play is irrefutably crucial.
And this is more so in the case of a developing nation, and emerging market like India.
Availability of Funds and Credit
Mostly the MSME retailers are waiting for the tax adjustment and other schemes in the upcoming budget. Simplified GST structures and lower compliance costs can alleviate operational burdens and foster ease of doing business. said Ridhima Kansal, Director, Rosemoore
Tax rebates or subsidies for small and medium-sized retailers on the use of electronic payment and e-commerce systems will boost their development.
In addition, setting up a fund targeted for low-interest rate loans to retailers can help ease the working capital situation such that they can grow the businesses and invest in newer products.
Pexels
According to Aditya Jangid of AdCounty Media, credit accessibility was bolstered by the enhancement of Credit Guarantee Schemes and increased MUDRA loan limits alongside the establishment of e-commerce export hubs that have facilitated global trade.
Such measures will allow the continued growth of the sector and its contribution towards the economy.
The sector expects interest rates on the loans to decline and more credit guarantee programmes to be established for small businesspersons to access capital without a struggle. They would be further encouraged by simplified loan approval and reduction of required collaterals.
MSMEs and Taxation
MSMEs are considered a critical engine of growth for any economy, including India, as they contribute to employment generation and economic development in the country.
Toward the Union Budget 2025, the MSME sector has the following key demands to establish its growth and sustainability:
Secondly, expected subordinate taxation and subsidies, designed specifically for ventures of MSMEs.
Goods and Services Tax | FPJ Library
A less complicated tax structure under GST, lower GST on inputs and registration and waive off for any new startup can go a long way in helping businesses to survive, opined Hariom Seth, Founder, Tagglabs.
Further, the sector demands policies that improve export chances are required by the sector. Measures such as export incentive for export focused industries, export promotion through trade fairs, and research on foreign markets could enhance MSMEs' export receptiveness.
The Role of Technology
Technology development and infrastructure, as well as, digitalization are also important elements of the wishlist. Increased spending on logistics, transportation, and digital platforms may potentially enhance operational performance and access to markets for MSMEs.
Specifically, government outreach for AI and automation, the pillars of modern digital business, would enable SMEs to perform worldwide.
According Hariom Seth, it has been anticipated by MSMEs that they are expecting for in the areas of training and human resources development such as skill development schemes and incentives for the recruitment of skilled officers.
Representative Image
We anticipate an expansion of these initiatives, implementation of streamlined regulatory framework and tax benefits in addition to incentivisation of digital adoption and green technology.
Recognising MSMEs as the backbone of India’s economy, such measures would help ensure the sustainability and scalability of MSMEs and solidify their role as employment generators and drivers of economic resilience across the country.
With intensifying global competition, such enhancements will make MSMEs better equipped to navigate the evolving market dynamics.
By meeting these expectations, the Union Budget of February 2025 should provide impetus to the further development of the MSME sector and increase its share in the growth of the Indian economy.
