What Budget offers to MSME

Written by PracticeGuru 1st Feb, 2021 2 Min Read

MSME Sector is the major contributor of our economy. It has lot of importance in terms of contribution to GDP and generating employment and exports. Budget has helped in enhancing the Competitiveness of MSME Products in the following way: What Budget offers to MSME

Rationalisation of custom duties on steel screws, plastic builder wares, prawn feed, finished gemstones and rationalizing exemption on duty free items to incentivise exports of garments, leather and handicraft items will benefit the MSME sector comprehensively.

Reduction of customs duty on semis, flats and long products of non-alloy and stainless steel and reduction of duty on steel and copper scraps will be of great help to the MSME sector.

Rationalisation of duties on raw materials for textile production will also help the MSME sector to be price competitive in the export market.

Reduction of BCD rates on caprolactam, nylon chips and nylon fibre and yarns will help the textile industry and MSMEs and would help in exports.

Calibration of Customs duty rates on chemicals to encourage domestic value addition and to remove inversions.

Rationalization of Customs Duty in Gold and Silver would provide required impetus to MSMEs working in this sector.

Rs. 15,700 Crores allocated to the MSMEs sector, double of this years budget.

Review of more than 400 old customs duty exemptions.

Rationalising exemptions on import of duty-free items as an incentive to exporters

Increase the limit for tax audit from Rs. 5 crores to Rs. 10 crores to further reduce compliance burden.

Set up a Conciliation Mechanism for quick resolution of contractual disputes.

PM Atma Nirbhar Swasth Bharat Yojana will provide impetus to the MSMEs as a large proportion of them are involved in health related activities. They revised definition of MSME, have already brought many more such units in the health sector in the ambit of MSME.

Proposal for setting up of seven textile parks across the counrty under the Mega Investment Textile Parks scheme will generate further activities among the MSMEs due to strong forward and backward linkages

Enhanced Capital Expenditure and Infrastructure spending will have substantial and long term positive spin offs for the MSME sector.

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