Come end-February, and India Inc waits anxiously for the presenting of the Union Budget. A yearly exercise that affects the lives of every Indian with new laws, new stipulations, new slab rates, the budget involves strategy change for businesses. Let’s see what this year’s budget, Union Budget 2013-14, has for small-businesses and start-ups: • Availability of non-tax benefits for 3 years: Agreeing that “Micro, small and medium enterprises (MSME) have a large share of jobs, production and exports. Too many of them do not grow because of the fear of losing the benefits associated with staying small or medium” the budget proposed that the non-tax benefits may be made available to a MSME unit for three years after it graduates to a higher category. • SIDBI’s refinancing capacity increased: In order “to provide greater support to MSMEs” the budget proposed to enhance the refinancing capability of SIDBI from the current level of `5,000 crore to `10,000 crore per year. This, TR Bajalia, Deputy MD, SIDBI, says will be “helpful in providing credit facilities at affordable rate by Sidbi to micro, and small enterprises through banks and SFCs. This will benefit over 3.5 lakh MSEs.” • Increased SIDBI’s India Microfinance Equity Fund by 100 crore: With the proposal to allocate another 100 crore to the fund, over and above the 100 crore already allocated in the budget, TR Bajalia said that it was “expected to expand reach of 60-70 additional MFIs, benefiting more than 12 lakh additional clients, mostly women” • Funds to SIDBI to set up a Credit Guarantee Fund for factoring: The Budget proposed to provide500 crore to the Fund. This tool of financingwill therebybenefit small suppliers who often get stuck owing to availability of adequate financing at the right time. • Incubation Funds Given to Academic Institutes to Qualify for CSR Expenditure: What brought cheer to young start-ups was when the Finance Minister said, “Incubators play an important role in mentoring new businesses which start as a small or medium business. The new Companies Bill obliges companies to spend 2 percent of average net profits under Corporate Social Responsibility (CSR). I am glad to announce that the Ministry of Corporate Affairs will notify that funds provided to technology incubators located within academic institutions and approved by the Ministry of Science and Technology or Ministry of MSME will qualify as CSR expenditure.” Probably one of the most impactful proposals, this will pave the way for more incubation money in the campuses and will allow angel investors to put their money on new ideas without worrying about taxes. Experts in the industry are already lauding this proposal by saying that allowing direct transfer of money from companies to incubator, rather than pulling it up centrally and then disbursing may improve the efficiency of fund allocation. • Start-ups listing on SME Exchange: The FM also announced that start-ups can list themselves on the SME exchange, without the need to go public. This will enable the flow of greater liquidity and will also ensure that transaction costs of going public later will come down. Do write in to us to tell us how the budget has touched your business and how you have benefitted from it.
2013-03-06 00:00:00 2013-03-06 00:00:00 https://quickbooks.intuit.com/in/resources/money-finance/union-budget-2013-14-small-businesses-in-india/ Money & Finance English https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2017/05/Union-Budget-2013-14-SMBs-in-India1.jpg Union Budget 2013-14 & Small Businesses in India
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.