Pre-elections the sitting Congress lead government passed the 2014 Interim Budget to tide the country over until a new government is elected this May. While this budget may get over-turned by the next ruling party, in this post we examine what the budget means for Small Business and the ways in which you may still benefit while it is in play. Here are a few of the highlights of the Interim Budget and what it could mean for you and your business:
• Reduction on Excise Duties on Vehicles:
The excise duties on small cars, scooters and other vehicles were reduced from 12% to 8%. While this measure was taken to curtail the negative growth of India’s teeming automobile industry, this could be good news for your business if you are looking to invest in a company vehicle.
• Increase in Costs of Imported Cellphones:
While you may run a bulk of your business from your smartphone, now might not be the time to upgrade as prices of cellphones will continue to soar. Though prices of phones made in India will become cheaper. From a small business manufacturing perspective, this is good news as it will spur the growth of Indian based manufacturing units.
• No Change in Tax Rates: Small Business Owners who are filing taxes on behalf of their companies found no changes in the governments taxation policy towards them. Their tax rate stagnated while the tax on the super –rich was increased by 10%.
• Education Loans: The interim budget saw imposition of a moratorium on the payment of interest on Education loans until December 2013. If you are a small business owner who had just completed your education, this could directly impact on your personal finances and repayments of loans. Other sectors of your business that it will an effect will be hiring. Recent graduates will not be under the burden of this interest and may be more willing to work for a moderate sum at a start up rather than opting for a high paying corporate job. This stipulation is likely to benefit almost 900,000 students .
• Bank Interest Rate to go up: One of the fallouts of the Interim Budget was that bank interest rates will be slated to rise. This could affect your plans for expansion if your small business planned to take a loan to cover an investment in infrastructure, new offices or technology. While this was not a feature explicitly stated in the 2014 Interim budget, this is seen as a result of high inflation rates in the country.
While the Interim Budget is in effect until June 2014, the aim most analysts put forth for this budget was to increase the spending capacity of the consumer class, spur on automobile and mobile manufacturing units. The finance minister while giving his budgetary address put India’s Economy at 11th in the world and asked the nation to consider the effects of the nation’s economic slowdown as a direct effect of the global market scenario.