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Small and Medium Sector Enterprises face difficulties in raising capital and are often dependent upon banks for the same
Navin Joshua, Founder of Fashos.com
Small and Medium Sector Enterprises face difficulties in raising capital and are often dependent upon banks for the same. The move by finance minister Pranab Mukherjee to set up a Rs 5,000 crore India Opportunities Venture Fund with SIDBI is likely to ease some of the difficulties faced by MSMEs. The move is also likely to encourage new entrepreneurs to set up their own businesses which in turn will result into more employment opportunities.
The increase in the tax slabs will also help in increasing disposable income of customers which in turn help them increase spending and investments. This will further augment the growth in the retailing sector (or even e-commerce sector, a modern and smart way of sale & purchase online). Further, the growth sentiments portrayed by the finance minister for the economy lays the ground for increased confidence among the masses which will usher in sense of well being and improved spending.
Dinesh Agarwal, Founder & CEO, IndiaMART.com
We welcome the Union Budget 2012-13 presented by the Hon’ble Finance Minister (FM) today.
While the FM called for speedy reforms today, the Budget did not indicate much in that direction. The key highlight, however, was ‘GST’ which is now expected to be operational by August 2012. We hope that this timeline is met as it would certainly help address the multiple taxation issue faced by the MSMEs currently. We had also expected some effective mentions to simplify taxation and also consolidate multiple departments to allow better compliance by MSMEs. This still remains to be looked at by the government.
Another positive for MSMEs in this budget was allocation of Rs 5,000 cr to SIDBI for venture fund which would enhance equity availability to MSMEs. Exemption of capital gains tax from sale of property when proceeds are used for investment in SME would also help augment funds for SMEs to a certain extent.
The fillip to handloom, powerloom and leather clusters is seen as a positive move for growth of small enterprises in these sectors.
With the manufacturing sector facing deficit in skilled manpower, the FM’s proposal to provide weighted deduction for expenditure on skill development will help bridge some gap.
Also, the move to raise the turnover limit for compulsory tax audit for SMEs to Rs. 1 crore from Rs. 60 lakh would also bring relief to many SMEs.
We believe that there was a scope for bolder announcements for MSMEs which could have brought a sea-change in their productivity and growth by eliminating the challenges faced by them.
Vikas Purohit, Chief Executive Officer, Planet Retail Holdings
Today’s Union Budget provided two positives for the retail industry. One, the Finance Minister’s statement about the active efforts on for the introduction of 51 per cent Foreign Direct Investment (FDI) in multi-brand retail is a welcome sign for the Indian retail sector as well as for consumers. The phased introduction of GST from August 2012, as announced by the Finance Minister today is also a step in the right direction. GST will streamline the various taxes we are required to pay and bring almost all transactions under a single tax net. The service tax increase from 10 per cent to 12 per cent will cause a rise in price of products such as apparel, luggage, electricity and even electronic appliances. We had hoped for a greater increase in the tax exemption limit, as Rs 1.8 lakh to Rs 2 lakhs does not really provide much additional disposable income for the common man.
Satya Prabhar, CEO & Founder, Sulekha.com
Overall, the budget gives a feeling of Brick-and-mortar sensitivity in an era where subsidies in technology infrastructure is crucial to growth. Absence of specific subsidies in cost of Internet access a critical concern. This is a key growth requirement, considering the fact that India is amongst the weakest in Internet penetration. We Hope that the PPP in infrastructure as a part of the 12th 5-year plan will give a fillip to technology/telecom infra investments.
M.P. Vijaykumar, Chief Financial Officer, Sify Technologies
Not a disappointment in its entirety. The FM had too many compulsions and issues to address and they cannot be addressed in a fiscal budget. Atleast, there is reaffirmation of GST, DTC becoming a reality. The announcements towards fiscal discipline in terms of subsidy cap and focus towards long term growth –R&D, venture capital funds scope enhancement, Investment linked deduction are steps in the right direction. The key differentiator now will be in how the government holds its nerve in delivering on hitherto taboo subjects like subsidies and fiscal deficit.