New Delhi, Feb 2 (KNN) Finance Minister Arun Jaitley tabled the Union Budget 2018-19 in the parliament yesterday proposing schemes and allotments for different sectors including the Micro, Small and Medium Enterprises (MSMEs).

Here is a quick review and analysis of what is new for the MSMEs as compared to the Union Budget 2017-18.

Taxation

2017-18: In a bid to boost to the MSMEs, Jaitley proposed to reduce the tax rate of MSMEs reporting turnover of less than 50 crore rupees to 25 per cent from the earlier 30 per cent. He also made an assertion that this benefit covers 96% of the total companies in India that are filing tax returns.

2018-19: Jaitley this fiscal announced to extend the benefit of the reduced rate of 25 per cent also to companies who have reported turnover up to Rs 250 crore in the financial year 2016-17.

MUDRA Yojana

2017-18: The government announcement to double the lending target to Rs 2.44 lakh crore under the Pradhan Mantri Mudra Yojana for 2017 aiming to benefit the small entrepreneurs.

2018-19: Finance minister Arun Jaitley in Union Budget 2018 proposed allocating Rs 3 lakh crore for Micro-Units Development & Refinance Agency Ltd (MUDRA). This figure stands as a 20 per cent rise from the last year. The Budget 2017 had allocated Rs 2.44 lakh crore for Mudra.

Defence Sector

2017-18: The defence sector received an allocation of Rs. 2.74,114 crore in the Union Budget 2017-18

2018-19: Rs 2, 95,511.41 crore has been earmarked for Defence.  This accounts for 12.10 percent of the total Central Government expenditure for the year 2018-19.

Also the finance minister hinted at formulating a new industrial policy for defence sector.

Textile Sector

2017-18: Total budget allocation to the Textile Ministry stood at Rs. 6226.5 crores for the year 2017-18 aiming at technological upgradation support and incentives to boost competitiveness.

2018-19: An outlay of Rs.7148 crore has been provided for the textile Sector aiming at similar goals as set in the previous budget including allocation towards upgrading technology, skilling and generation of employment.

New focus areas for MSMEs in this year’s budget

Rs. 3,794 crore to MSMEs for mass formalisation. Also the Govt will soon announce measures to address non-performing assets of MSMEs.

Hinting at possible reforms in the near future, the government said that it is exploring possibility to reduce the Tax burden on MSMEs.

Govt will fund 12% of wages for new employee of EPF as per the proposal made in the recently presented budget.

Also to improve Ease of Doing Business in the country, Finance Minister Arun Jaitley in his Budget 2018-19 speech, has extended the fixed-term contract hiring beyond apparels to all sectors. The move would allow employers to hire workers for specific projects on contract for a fixed term. (KNN/DA)