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Budget partially populist in nature, with aim on vote banks to please all, say Industry Experts
Union Budget 2013-14 is out, and lots of interesting decisions have been taken by the Finance Ministry. Our expert Ashwin Srivastava, CEO of Incept, reviews it from the perspective of a Small and Medium sized business.
Here are a few important conclusions which are going to impact of SMEs of India in one way or the other:
1. Reduction of Customs Duty to promote domestic Manufacturing:
2. Skill Development and Incubators' Boost: Entrepreneurs, be happy. All the student entrepreneurs who start off from incubating centers in their colleges are going to be pleased, as corporates who invest in them are going to save some taxes. This will help SMEs in their growth as innovation will have better support now.
3. Surcharge on Domestic companies earning more than 10 Cr: This was not really needed as per some opinions, and the limit must have been higher. This will definitely help create a more socialist environment, but may hamper the super-entrepreneurial spirit a little. Should not be a big concern for small businesses.
4. Tax for Super-rich: I don't care, but may be you do, if you are the owner of sme SME with huge taxable income. If its greater than 1 Cr, be ready to pay more.
Tax Credit for those between 2L-5L: I do care, since the slabs have remained same and a small tax credit of Rs 2000 has also been added. A bit of more happiness for our employees.
5. Others (explained in pure layman language)
Service Tax on AC Restaurants:
Boost to Mid-day Meal: All those SMEs looking to automate processes for the government can see some scope of revenue generation cum CSR here.
1% TDS for transactions over 50L for immovable property: Nice move for further regulation of housing sector
Agriculture boost: Easy loans for farmers from public as well as private banks will definitely help agriculture focused SME businesses in growth
Good boost to Infrastructure without any expensive plans: A well designed effort to rein in fiscal deficit while boosting development. Every SME benefits from such new projects, after all it helps drive the growth cycle
Targets: This, according to me, is a concern. Especially the Fiscal deficit target. After all, how do you control the deficit without taking any stern steps towards that.
Overall, nothing great to cheer for, by SMEs. But some great moments for the Micro enterprises, they can clearly see a better entrepreneurial path for them. And not to forget, GST is going to come soon!