Interim Budget 2019: MSMEs welcome 2 pc interest subvention on loans upto Rs 1 Cr

Union Finance Minister Piyush Goyal on Friday presented the Interim Budget 2019 and said, “Effective steps are being undertaken to strengthen the MSME sector and provide special benefits to small businesses.”

He recapped the government measures to enhance credit access and boost employment for MSMEs. Goyal discussed the 59-minute loan scheme, PSU’s 25 percent procurement from MSMEs mandate, Government e-Marketplace (GeM), and more.

For our complete coverage of what the Budget had in store for MSMEs, click here.

Prior to the Budget speech, MSMEs had indicated that income tax and GST issues were their top concerns. They also said they hoped implementation of proposed schemes would improve.

To read more about MSME expectations from the government in the Budget, click here.

Now, the question arises: what do MSMEs think of the Budget’s proposed initiatives for small businesses? What do they think about the fact that there were almost no brand new schemes to be proposed?

Here is what small businesses and MSME stakeholders across India told SMBStory:

Alok Mittal, CEO and Co-Founder, Indifi Technologies, said, "The Budget announcement in relation to MSMEs and startups are welcome. Enabling more digital lending for MSMEs is a key enablers to realising their potential."

Rajiv Talreja, Serial Entrepreneur and Business Coach, said, "I believe this is a good Budget for the MSME. Most importantly, the government has opened a new market for homegrown entrepreneurs by allowing sourcing from MSMEs through government up to 25 percent. This includes three percent from women-run organisations.”

He added, “Government e-Marketplace (GeM) has transformed procurement by making it transparent, thus giving MSMEs an opportunity to sell their products through GeM. Revisions in the GST slab rates, would be an added welcome development."

Prateek Gupta, Founder, Desi Farms, said, "In my opinion, the two percent rebate in interest on loans upto Rs 1 crore is a great move. I believe it will certainly boost the moral of the entire MSME industry. However, the process of loan distribution must be transparent and hassle free.”

In a release, NASSCOM said that the highlight of the Budget was the announcement of the National Center for Artificial Intelligence and the AI portal. The industry body said that this will play a key role for India to accelerate AI development and adoption to the last mile.

NASSCOM, partnering with the government for this key initiative, could see the upliftment of technological capabilities of small businesses in AI.

Overall, the Budget spells well for the SME fraternity due to the fact that it has a positive and business-friendly tone, with a strong message of reliefs to the middle class (which makes up a big part SME of the workforce).

Sameer Vakil, Co-founder and CEO, GlobalLinker, said that he is particularly pleased about the two percent concession on interest for SME loans upto Rs 1 crore for GST-filing SMEs. He said, “This will provide a significant boost and encourage entrepreneurship, while helping widen the base of tax paying firms.”

He also said he is  happy to see that businesses with less than Rs 5 crore annual turnover, covering nearly 90 percent of GST filing companies, are being allowed to file quarterly GST returns. “This will be a huge relief to many SME firms,” he added.

N Chandramouli, CEO, TRA Research, said, “The interest subvention and the easing of loans through PSB loans under 59 minutes scheme will boost the industry which contributes to 69 percent employment  in the country. This will also boost the adjunct services industry that caters to MSME sectors, like advertising, market research, training, and public relations. This, in turn, will have a positive cascade on the services sector.”