(MENAFN- KNN India)
New Delhi, Feb 1 (KNN) The Union Budget presented by Finance Minister Nirmala Sitharaman has provided a booster dose of consumption through relief in personal income tax.
The new income tax threshold will leave over one lakh crore in the hands of the middle class for discretionary spending.
In spite of record allocation of capital investment in infrastructure during the last budget, the economic growth was seen spluttering in 2023-24. Therefore, a demand to boost consumption has been growing from all quarters.
Besides social welfare measures, the key Budget provisions focus on the following areas: Agriculture, MSMEs, Investments, Manufacturing and Exports and Innovation & Technology.
Terming MSME as one of the 'Growth Engine', the Budget revised classification criteria for MSMEs enhancing investment thresholds 2.5 times and doubling the turnover thresholds for MSMEs. With the changed criteria the new investment and turnover thresholds are: Micro (2.5 cr and 10 cr), Small (25 cr and 100 cr) and Medium (125 cr and 500 cr).
Federation of Indian Micro and Small & Medium Enterprises (FISME)- the national MSME body, has welcomed the upward revision in investment and turnover criteria for classifying MSMEs.
“Surge in prices of basic raw material due to disruptions in supply chains and conflicts have made it necessary for such an upward revision. It will be particularly helpful for MSMEs taking advantage of 25% reservation in public procurement”, FISME has said.
'The move will also be helpful in building up scale through technological upgradation. In a note dated 27th Dec 2024, FISME had recommended to the Government to enhance the turnover limit of Small enterprises to Rs.150 crore and that of Medium to Rs. 500 crore. It had pointed out that both RBI and SEBI considered companies below Rs. 500 crore turnover as not-large, evident from several govt. directives meant for large such as for registration at TReDS or filings under IT Act etc', it noted.
The coverage of Credit Guarantee for collateral free loans from Rs. 5 crore to Rs 10 crore is another announcement cheered by MSMEs.
Taking a cue from Economic Survey 2024-25 which called the Government to 'get out of the way' to boost business growth, the government has announced three groups.
Firstly, a National Manufacturing Mission covering small, medium and large industries is to be set-up for furthering“Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states. The Mission's mandate will include five focus areas namely Ease and cost of doing business; Future ready workforce for in-demand jobs; A vibrant and dynamic MSME sector; Availability of technology; and Quality products.
Secondly, an Export Promotion Mission is proposed with sectoral and ministerial targets, driven jointly by the Ministries of Commerce, MSME, and Finance. It will facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.
Thirdly, a High-Level Committee for Regulatory Reforms will be set up for a review of all non-financial sector regulations, certifications, licenses, and permissions. The committee will be expected to make recommendations within a year. The objective is to strengthen trust-based economic governance and take transformational measures to enhance 'ease of doing business', especially in matters of inspections and compliances. States are encouraged to join in this endeavour.
Put together, all three are meant to revive and accelerate manufacturing.
There are several other initiatives addressing start-ups, self-employed people, specific sectors: Toy, Footwear and Food processing, Stand-up India targets and clean-tech sector.
Overall, the budget 2025-26 is not likely to be inflationary as the deficit is within limits and might succeed in creating a demand revival leading to a surge in economic growth.
(KNN Bureau)
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