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MSME, SME and Manufacturing sector expectations from Budget 2022: As Union Finance Minister Nirmala Sitharaman is all set to present her third Union budget on February 1, 2022.
Here’s what the MSME & Small business expects from Finance Minister Nirmala Sitharaman:
Arnav Mutneja, Founder, ZinQ Technologies:
According to data, India has the potential to become a global manufacturing hub, with an annual contribution of $500 billion to the global economy by 2030. The economy is on the mend, with the government forecasting a V-shaped recovery. In terms of economic indicators, there are indications of rapid growth. Hence, we expect this year’s budget to be optimistic. With COVID continuing to make life difficult for the majority of the working class, this particular budget will likely be one of support for the industry.
The audiovisual and information technology industries have proven to be a critical sector in keeping the economy afloat. We expect the government to give this industry a much-needed boost by incentivizing manufacturing and reducing reliance on imports. A new era of digital transformation in production units or factory floors is taking shape and government initiatives in this regard will pave the way for a manufacturing revolution in India. We must also keep in mind that, with technology evolving at a breakneck pace, e-waste has become a major issue in the country. The government’s support for making factories more energy efficient will be highly appreciated.
Avinash Johri, Executive Director, MAXHUB:
The budget will be a pivotal event since it will set the tone for the ensuing fiscal year. This is the third budget in a row since the pandemic began and we still have a long way to go in terms of entirely eradicating the virus. What’s clear is that IT Communication & Collaboration Solutions like interactive displays and webcams used for video conferencing have played a key role in keeping life and business running smoothly even in remote and hybrid work environments.
Digital devices have clearly become indispensable in a variety of fields, including education, corporates, healthcare and many more. As a result, the government should consider lowering taxes to make these products (read: essentials) more accessible and affordable for the general public. By emphasizing on making in India, OEMs and ODMs have played a critical role. They do, however, lack the necessary infrastructure to make such a big adjustment. The budget should, therefore, also include strong proposals to help India’s industrial and manufacturing sectors grow. Improvements to the existing setup are expected and we’ll be watching closely.
Manish Bansal, Founder & Director, Window Magic:
In the Union Budget, we expect to see that it will emphasize streamlining taxation, investment, and offering to MSMEs, which can help in generating more revenue and employment. As we all know, for the last one and a half years, everyone has been affected by covid besides the government has given stimulus packages to MSMEs. But in the end, all these stimulus packages were part of the loan. In addition, it is a burden to MSME at large. So, we are expecting some advantage in this budget as in some reduction in income tax or something like corporate tax. Also, the price of the raw material is very high and it is not uniform and controlled as well. So, at least the government should rationalize the GST on manufacturing for MSME.
Lalit Mehta, Co-founder & CEO, Decimal Technologies:
2021 was a transformative year for the fintech industry with significant technology adoption in financial services. While traditional lending still accounts as a major credit provider in India, digital lending has picked up pace with the ease of process, less paperwork and use of alternate data sources, making it a key enabler for the MSME sector. Budget 2022 should introduce regulations that will help in greater credit access to MSMEs and curbing illegal activities while building trust in the digital lending process for the last mile.
In line with the government’s goal of creating a digital economy, introducing credit schemes will incentivise the sector and help in providing timely credit to MSMEs that have struggled due to the lack of credit accessibility through traditional means of lending which has directly affected their business opportunity. We have also seen a rise in the number of start-ups who have turned unicorns in the last year that showcases the potential of the startup ecosystem in India. We expect the government to introduce regulatory changes that would create an easy line of access for start-ups & MSMEs to secure credit from online lending players. This will further help in boosting our economy.
Nitin Potdar, Partner, J Sagar Associates (JSA):
SME, MSME and Manufacturing Sector, I think the Government of India should create a 5 year robust plan which will enable SMEs MSMEs to raise capital at easy terms, easy exit rules and most importantly a strong regulatory framework which will allow cross border collaborations; entry and exit of companies. Much easier than what currently is in the Companies Act.
Unless we give them a robust ecosystem for their growth and expansion, we would not see the revival of the SME and MSME sector. And we cannot ignore the fact that this sector is the largest contributor to the employment generation for the country, so this sector needs some very consciously determined robust 5 year plan.
Nishant Behl, Founder, Expand My Business:
Budget 2022 should provide incentives for the MSME sector for better integration of digital payment methods. By expanding the client base and boosting cash flow via faster money realization; giving upsell chances; lowering costs and establishing a digital footprint that allows for easier access to loans at lower rates, The digital payment ecosystem can further flourish.
Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital:
Union Budget 2022-23 is highly crucial to align the Indian economy’s growth trajectory. It is essential that the Hon’ble Finance Minister announces effective measures to enable speedy recovery and growth of the MSMEs, considering the sector’s significant contribution to the economy. It is encouraging to see Government’s support for the MSME sector in the last 12-15 months and we believe the efforts will only become more prominent in the time to come.
Anubhav Bajpai, Founder, VouchPro:
In the Union Budget, the government formulates various policies and strategically allocates funds to various sectors each year. Tech events have continued to evolve and grow in the aftermath of the pandemic. We anticipate that the government will take steps in this year’s budget to increase support for tech events in order to ensure that COVID protocols are met effectively. A policy that encourages technological innovation could boost the event industry’s growth and give rise to a variety of virtual and hybrid event solutions, such as the metaverse.
To encourage more product innovation in the event industry, we hope the government will lower direct taxes for startups. Because the virtual event space reduces carbon footprints, special tax incentives for expenses incurred to conduct events online could be offered. Aside from that, we anticipate the government encouraging R&D funds for global level innovations that will allow customers to be ahead of the curve in the event industry.
Divay Kumar, Co-founder & CEO, O4S:
We can expect the 2022 Union Budget to comprise more funds/schemes and initiatives that are focused on promoting technology and reviving the slowing economy. Startups who are considered to be the platform that could take the country to new horizons should be provided financial relief so that they can extend their runway for operations. Moreover, relaxations in GST, lending rates, and other regulations would support the ease of doing business in the country. With such reforms, businesses especially MSMEs could get the support of investors.