New Delhi, Feb 1 (KNN/ FISME) Walking on a tight rope and warding off the potential ire of demonetisation critiques and election commission, Finance Minister Arun Jaitley presented the Union Budget 2017-18 focussing farmers, rural area, small tax payers and infrastructure.

Though not fortunate enough to have the favourable treatment in the Budget, the MSME sector is sanguine about Finance Minister’s promise of a suitable amendment in the Negotiable Instrument Act to address the problems of cheque bouncing. 

“Strengthening of cheque as key payment instrument for commercial transactions could revive the trade credit market and have a huge favourable impact on the working capital requirements of MSMEs,” says Dr. Sangam Kurade, President of Federation of Indian Micro and Small & Medium Enterprises (FISME).

FISME has also welcomed a 5% reduction in corporate tax for units having annual turnover up to Rs. 50 crore.

‘Thus both type of MSMEs whether companies or firms would enjoy the Tax cuts as besides the smaller companies, tax liability has been reduced for individuals also’, Dr. Kurade added.  

FISME also welcomed the reduction on non-cash turnover of small businesses for the purpose of presumptive tax from 8 to 6%. Under the scheme, small businesses below the annual turn-over of Rs. 2 crore are not required to maintain detailed books of accounts for purpose of Income Tax but pay a presumptive tax. 

Commenting upon the Finance Minister’s alluding to reforms in labour laws FISME President said that the Economic Survey also highlighted the need for reforms towards affording greater choice to workers for opting social security instruments such as Provident Fund and Insurance and foster competition amongst service providers.

While expressing satisfaction that the Budget considered a few suggestions handed to the Finance Minister earlier on Tax, labour reforms and cheque related issues, FISME expected more targeted announcements related to MSME sector which was badly hit by the demonetisation.

However, FISME hoped that a massive flow of funds towards farmers, rural  areas and infrastructure would reignite demand that would benefit MSMEs also. (KNN/ FISME)