Who says what? MSME sector reacts to union budget 2017

K.E.Ragunathan, President, AIMO: The budget has helped the profit making companies to do better and doesn’t address the sick units to revive as it is the sector which has been affected mostly due to demonetization. Government has nearly ignored the companies which has adverse impact of demonetization and are dying as most MSMEs have lost nearly 60% of their revenues. There is need for more concession towards revival of the MSME that are not making profit, should have been extended. Today, most MSMEs is facing issues with cash flow, issues with NPAs forms, issues with jobless activities should have been addressed by the Budget but it has failed to meet the needs of the MSMEs. FM has announced the Rs 10,000 crore to banks, instead of that what he should have done is restructuring the NPAs norms. If FM would have announced that out of that 10,000 crore, 40% of the amount be used for MSMEs that would be appreciable.

Mysuru Industries Association: Budget does not have any specific welcoming feature for the MSME Sector but with some measures for the overall economical development of the nation. MSME expectations not full filled there is no specific support schemes, allocations for MSME sector after demonetization effect, MSMEs expected more support schemes in the budget but there is no allocation for Industrial Infrastructure, No relief in interest rate for the MSME loans & NPA norms for MSME has not been relaxed.

Siddharth Chaturvedi, Director, AISECT: AISECT hails Government’s decision of opening 100 international skill centres. Work is already in progress to map India skills sector to international skills sector. For example, there is already equivalence in skills in India and the UK. These 100 international skills centres will go a long way towards providing skilled manpower for the international skills market. Most candidates who go overseas do so without a skills certificate. The launch of these centres will be a good step to make sure that all the labour going out of the country will be certified labour.

Milind Kamble, Chairman, DICCI, Pune: Union Budget 2017 has encouraged SC-ST entrepreneurs, the target fixed by the Finance Minister Arun Jaitley for this fiscal year is 2.24 lakh crore that will benefit the micro units which use to deal in the cash, affected by the demonetization badly. 34% rise in the special component plan (SCP) allocation that is Rs 52393 crore, which is welcomed by the DICCI as it will boost the MSMEs.

Anirudh Dhoot, Director, Videocon: The 2017-18 financial budget based on the objective to Transform, Energise and Clean India, is aimed at spurring economic growth, synergizing investments and establishing greater transparency. With 100% rural electrification, lowered tax rates for MSMEs, and increased allocation towards schemes like M-SIPS and Electronic Development Fund (EDF), the budget fosters positive steps to further accelerate manufacturing capabilities and boost employment in the country. High disposable income as a result of lower tax rates will lead to higher purchasing power of the individuals. This will lead to increase in demand of consumer goods.  Also, we are happy to learn that GST is on track and will be implemented in April 2017. In addition to this, the Abolishing of Foreign Investment Promotion Board to ease the inflow of Foreign Direct Investment (FDI) will expand investments significantly.  All this will play an extremely important role in realization of Government’s dream of ‘Make in India’.

Deepak Kumar Maroo, General Secretary, Jharkhand Small Industries Association (JSIA): As the allocation of fund has been made for the infrastructure that will promote the growth. MSME sector is positive due to the allocation of the funds in the Union Budget 2107. The market will boost, the next two years that is 2017 and 2018 will be productive for the sales.

Naveen Jain, Managing Director, Dayachand Engineering, Meerut: Though there is little support because of the reduction in the Corporate Tax but expectations of the MSMEs were not considered up to the mark. We were expecting the rebate in the interest rates but it was not announced. 

B. Praveen, General Secretary, KASSIA, Bengaluru: Reducing 5% in the corporate Tax is an encouraging move for the sector as nearly 90% of the industries are SMEs. Increasing the amount available for MUDRA Yojna that is of 2.44 lakh is also a good move. Giving the Tax benefit up to 7 years will be encouraging for the startups. Skill is considered as the heart of the micro industries, Rs 4500 crore for rural skill development has been sanctioned will help in the growth of the MSMEs.  We were expecting the reduction in the bank rates and relaxation in the NPAs, if that would have happened it would be more effective Budget for SMEs.

Manish Goel, President, Indian Industries Association, Lucknow: Reduction in the corporate Tax from 30% to 25% is a welcome move for the SMEs, apart from this there is nothing much for Industries. Budget mainly includes social schemes and nothing much for the MSMEs.

B. Praveen, General Secretary, KASSIA, Bengaluru: Reducing 5% in the corporate Tax is an encouraging move for the sector as nearly 90% of the industries are SMEs. Increasing the amount available for MUDRA Yojna that is of 2.44 lakh is also a good move. Giving the Tax benefit up to 7 years will be encouraging for the startups. Skill is considered as the heart of the micro industries, Rs 4500 crore for rural skill development has been sanctioned will help in the growth of the MSMEs.  We were expecting the reduction in the bank rates and relaxation in the NPAs, if that would have happened it would be more effective Budget for SMEs.

Manish Goel, President, Indian Industries Association, Lucknow: Reduction in the corporate Tax from 30% to 25% is a welcome move for the SMEs, apart from this there is nothing much for Industries. Budget mainly includes social schemes and nothing much for the MSMEs.

Suyash Rai, Senior Consultant, National Institute of Public Finance and Policy, said, “This is a very good move as impact of demonetization would have been the highest for the small sector industries. It is an opportunity for the SMEs to retain their loss as these are the units which are responsible for the employment generation the most.”

Mustafa Nadeem, CEO, Epic Research: Budget has been given thumbs up by markets and corporate. It is budget for Gramin and lower middle class which forms majority of India. There is lot to cheer about this budget with some disappointments but overall direction is clear and if implemented will give major boost to spending and shaping up of rural economy.

All this has been done keeping fiscal responsibility intact is a big boost for the markets. Some of the notable highlights like lowering tax rate to 5% for income upto Rs. 5 lacs will increase the tax net, also the reduction of tax by 5% for corporate with annual turnover of less than 50 crores is again a positive. 

Sagar Kurade, Past President, AIFPA: Theme of the budget primarily seems to integrate the farmers with the agri and food processing sector. It is the most suggested theme as far as food processing MSMEs are concern. In general micro, small and medium enterprises (MSME) related to Food processing sector are definitely going to be encouraged as there has been reduction in the corporation Tax by the Finance Minister. There was something which we would have also liked to see in the budget and that was related a central subsidy allocation to food processing MSMEs.

The connectivity of farmers to industrial and agriculture sector will be encouraged and hence the closure interaction between farmers and food processing MSMEs. Farmers will definitely have choices both in terms of infrastructure and food processing sector. It also enables the farmers to get the better values what he produces.

Parth Nyati, COO, TradingBells: This is a very good growth oriented budget meant to benefit rural and urban population alike. IPO for public sector undertakings like IRCTC, IRFC and IRCON is a pleasant surprise and would ensure more retail participation. Reduction of corporate tax would benefit 96% of the Indian corporate having turnover less than 50 corers. We can see SMEs getting a positive boost from this move. Long term capital gain tax on equity markets remained unchanged which will further boost investor participation. Service Tax and STT also remained unchanged. Some reports suggested that both could go up. It gives a positive kick right after the budget. However lowering of STT would have benefited the financial markets. More Government spending on infrastructure like highways, railways, coastal roads, affordable housing will pump in liquidity in the market which was required post demonetisation.  Focus on digitalization and incentives on online payments would increase digital payments and will benefit online trading. Abolishment of FIPB and automation would ease out the process for Foreign Portfolio Investments. We can expect more foreign investments. There are a lot of benefits for farmers aimed to double their income in 5 years. Irrigation based stock will get a boost out of this.   

Abnish  Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments Pvt. Ltd: We rate the budget as ‘No Bad news is good news’. Focus remained more on the growth of rural India keeping the fiscal consolidation in place and much needed boost to the stalled economic activities post demonetization. Finance Minister’s budget was filled with rural sops to heal wound aroused amid demonetization. Moreover, cut in tax rate for SMEs will not only boost the sector but also it will reduce the ongoing stress on the banking system. Importantly, middle class population being the largest driver of consumption story, also got benefitted by the reduction in tax from earlier 10% to 5%. Demonetization pain for the housing sector can be relieved as several measure are proposed like reducing the holding tenure for long term capital gain making hosing sector as a infra sector and greater emphasis for affordable housing. Overall, it was much needed budget required for the market.

Manika Premsingh, Economist and Founder, Orbis Economics: Small and Medium enterprises (SMEs) have been benefitted in the first segment of the income tax slabs and that is exceptional as particularly since we are going to see a slower growth in the sector so there need to be more avenues for encouraging consumption as well as encouraging the growth and business.

Dr. Yerrum Raju, Economist, MSME Lead Consultant with Government of Telangana: The Union Budget brings opportunities for the small units to widen their growth. This is a growth oriented budget for the MSME sector. While small companies (up to Rs 50 cr turnover) will be happy, on the other hand Budget has no corporate tax reduction for large companies.

Giriraj Singh, MoS MSME:Tax rate for companies with an annual turnover up to 50 crores to be reduced to 25%, to strengthen MSME sector.

Dr. Sangam Kurade, President, FISME:  Less than 3% of MSMEs are body corporates under Companies Act because of higher taxation on companies than on individual and firms and that is why while making a presentation before the FM, I had highlighted the issue myself. In the Budget memorandum submitted to the Finance Minister FISME demanded that Income Tax on companies may be levied in slabs as available to individual tax payers.

Pankaj Patel, President, FICCI: MSMEs would be encouraged to come into the formal sector with Budget2017 announcement:

CII: Tax for companies with less than ₹50cr turnover reduced by 5% to 25%. Big win for the MSME sector