A pivotal budget for MSMEs

Kolkata
2 Feb 2018

The Union Budget 2018 is robust for Agriculture & Rural economy. Given we are in an election year, a Populist Budget (focus on Rural & Pro-poor) was certainly coming; however, maintaining a fiscal deficit of 3.5% for this year and promise to bring it down to 3.3% next year is very realistic in face of it. Some disappointments like introduction of LTCG Tax & no big tax relief to salaried class are there in the budget but we have to consider the fact that FM was batting on a tough wicket and all eyes were on the Fiscal Deficit numbers.
Outside Agriculture & Healthcare, this budget has given tremendous boost to MSMEs as Corporate Tax Rate cut to 25% for companies having turnover upto Rs 250 cr is a very welcome step. This move is a big boost for the companies listed on SME Platform as this will generate interest among value investors for the SME listed companies, as reduction in tax rates will result in earnings growth.
The FM also promised to review refinancing policy and eligibility criteria set up under MUDRA to enable better financing for MSMEs. The FM also assured to revamp the online loan sanctioning facilities for MSMEs to enable prompt decision making by banks.
For MSMEs sector which is a major growth engine of the Indian economy, this is a very promising budget and should provide a growth impetus to job creation. We are going to be the biggest beneficiary of these measures, as we work very closely with SMEs to get them listed on both the exchanges. This will definitely increase the number of SMEs going to be listed on the exchanges, said Kamal Kumar Kothari, MD, Guiness Corporate Advisors Pvt. Ltd. (EOIC)