Deloitte’s Mahesh Jaising talks about Union Budget’s implications on MSMEs

In a fireside chat at the India SME Forum (ISF) earlier this week, Mahesh Jaising, Partner - Income Tax, Deloitte, shared insights on Budget 2023 and its impact on Indian MSMEs. The session was moderated by Vinod Kumar, President, ISF.

"Union Budget 2023 focuses on three primary things, enabling ease of doing business for MSMEs, addressing working capital challenges, and creating more opportunities for small sellers to access the manufacturing space," Jaising highlighted. A big announcement for the sector in the Budget was the infusion of Rs 9,000 crore into the credit guarantee scheme.

He added that going online will help small sellers to have a level playing field. “The government’s Digital India push will be a huge jump for the MSME sector to move beyond its immediate customer base and get the power of outreach that the online platforms provide."

Ecommerce platforms enable MSMEs to reach customers beyond their immediate local borders, lower entry barriers to international markets, and create more jobs.

Digitisation has been a major focus area in the Budget, with the setting up of an entity DigiLocker for MSMEs to share and store documents online. MSMEs have commended these steps taken by the government.

"The government has taken progressive steps to amend section 43B of the income tax in the Union Budget 2023 - this is a welcome move that will help MSMEs with ease of doing business," said Jaising.

To help small and micro businesses, the government has proposed changes to Section 43B of the Income-Tax Act of 1961. Payments made to MSMEs that are not made within 45 days of the due date are not eligible for deduction.

“The government’s decision to exempt online sellers [from GST] with less than Rs 40 lakh turnover will be a huge boost for MSMEs adopting ecommerce,” he added.