Everything You need to know about Union Budget 2023-24
Union Finance Minister Nirmala Sitharaman presented the fifth budget of the Modi 2.0 period. This is Amrit Kaal’s first budget to be presented. The Union budget 2023 attempts to build on the advancement of the Indian economy, which rose from being the tenth to the fifth largest in the world.
The focus of the current fiscal year’s Union Budget is on inclusive development, which includes promoting public-private partnerships, skilling (teaching-upskilling), and launching medium- to long-term national development initiatives. This fiscal year’s Union Budget also supports SMEs or small businesses’ access to capital and ease of doing business.
India overtook the UK to become the fifth-largest economy in the world in 2022, and it is now on track to meet PM Narendra Modi’s target of a $5 trillion GDP by 2026–2027. Despite concerns about an upcoming global recession, supply disruptions, and the conflict between Russia and Ukraine, India has emerged as a bright spot, expanding more fast than most other key emerging countries.
This spirit of resiliency has been proven by the 6.3 crore for micro, small, and medium-sized businesses, which account for 30% of the GDP and employ approximately 11 crore people. The MSME sector’s sales in a number of industries have risen to 90% of their pre-pandemic levels, and India’s small firms are directing a turnaround.
Government initiatives including expanding the Emergency Credit Line Guarantee Scheme, revamping the Credit Guarantee Trust for Micro and Small Enterprises, and launching the Pradhan Mantri Employment Generation Programme to promote self-employment are largely to thank for this recovery.
However, given the MSMEs’ mostly disorganized nature, rising interest rates, and a weakening external environment, it is critical to continuously address their pain problems.
Union Budget 2023-2024: A Great Support for all SMEs and MSMEs
The budget has set aside 9,000 crore for investment in the MSME sector, opening up 2 lakh crore to support collateral-free loans. This occurs as nations around the world get ready to fight an upcoming recession. The cost of credit will also decrease by 1% as a result of this.
The Vivad Se Vishwas programme was deemed ineffective by FM Nirmala Sitharaman for MSMEs. In cases of failure to fulfil contracts, MSMEs will get 95% of the performance security from the government under this programme.
Providing MSMEs with timely payments is a significant next step. Only when the debt has been repaid may payments made to MSMEs be deducted.
Additionally, only 10% of our MSMEs are now online, so rapid adoption of these new standards is essential to maximizing their potential. In anticipation of the advantages of ecommerce and digitization, such as a significantly larger target market, better efficiencies, and simpler access to funding, millions of small businesses are waiting in the wings.
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By utilizing the National Logistics Policy, our MSMEs may become competitive. The National Logistics Plan (NLP) seeks to bring logistics costs as a percentage of GDP down from 13–14% to 8%, where they would be competitive with developed nations. Price reductions will encourage more MSMEs to use tech-enhanced logistics services, but they will require support to fulfil the rising e-commerce demand from smaller towns and semi-rural areas.
To do this, the government might work with India Post, a last-mile delivery partner with cutting-edge technology who can enable cash-on-delivery transactions at affordable rates. Similar to this, by utilizing Indian Railways’ unequalled reach, it is able to carry goods quickly and economically to the remote areas of the country.
8 Important points from the Union Budget 2023 for MSMEs
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PM VIKASH
For traditional craftspeople and artists, a package of support has been developed. Despite being a vital component of India’s economy for generations, this society has frequently received little attention.
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Their products’ quality, scope, and reach will all be increased thanks to this new plan of Union Budget 2023, which will also incorporate them into the MSME value chain.
This scheme will include-
- Financial assistance
- Skill training
- Knowledge of modern digital techniques
- Green technology adoption
- Linkage with local and global marketers
- Digital payment adoptions
- Social security
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GREEN GROWTH
With the announcement of Union budget 2023, numerous programme for green energy, green farming, green transportation, green buildings, green equipment, and regulations for energy efficiency across numerous economic sectors are planned for implementation.
Startups and direct-to-consumer companies who work in the clean industry and offer cutting-edge green solutions will be at the forefront of government perks and assistance.
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DIGITAL PUBLIC INFRASTRUCTURE FOR AGRICULTURE
An open source, open standard, and interoperable public good will be developed for digital public infrastructure in agriculture.
The announcement calls for assistance in fostering the expansion of Startups ideas and the Agri-tech sector. In order to create long-term, sustainable solutions and income prospects, farmers have a fantastic opportunity to go digital now.
The government will also establish an Agriculture Accelerator Fund to support young entrepreneurs in rural areas who are starting up new businesses in agricultural field. The Fund decided with Union budget 2023 will work to provide new, reasonably priced solutions to problems encountered by farmers.
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INVESTMENTS IN LOGISTICS AND REGIONAL CONNECTIVITY
The Gati Shakti Scheme, which was announced last year, continues this year. The government will emphasize the importance of last and first-mile connectivity initiatives for transportation infrastructure.
To increase regional aviation connectivity, 50 more airports, heliports, water aerodromes, and advanced landing grounds will be revived.
This would be a positive move given the growing popularity of eCommerce business in Tier 2 and Tier 3 cities. Union budget would speed up accessibility for more recent pin codes and increase delivery times.
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EASE OF DOING BUSINESS
The Jan Vishwas Bill, which would reform 42 central acts and advance trust-based governance, has also been introduced by the government in Union budget.
By using a “risk-based” strategy rather than a “one-size-fits-all” one, the KYC procedure will also be streamlined.
Another suggestion is to make the PAN the universal identity for all digital systems utilized by the designated government institutions.
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INNOVATION AND DIGITAL TRANSFORMATION
Making India a technologically advanced and future-proof nation has remained a priority for the Indian government.
Access to anonymized data will be made possible through a National Data Governance Policy that the government will publish.
MSMEs, major companies, and charitable trusts will be able to use DigiLocker to securely store and share documents with various authorities, regulators, banks, and other business organizations as necessary.
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RELIEF FOR MSMEs
As mentioned above, The central government has pledged to restore 95% of forfeited funds in cases when MSMEs fail to complete contracts during the Covid term, which is a significant step in the MSMEs’ favour.
In cases when MSMEs fail to execute contracts throughout the Covid period, the federal government has promised to recover 95% of forfeited cash, which is a big step in the MSMEs’ favor.
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UPSKILLING THE YOUTH
Within the next three years, the government will introduce the Pradhan Mantri Kaushal Vikas Yojana 4.0 to train thousands of young people. The programme would incorporate industry partnerships, on-the-job training, and course alignment with industry demands.
The programme will also include cutting-edge courses for Industry 4.0 like soft skills, coding, AI, robotics, mechatronics, IOT, 3D printing, and drones.
The government has promoted financial inclusion and the digitization of money across industries, as seen in the Union Budget 2023.
Minister Nirmala Sitharaman expanded company financial aid in this Union Budget of 2023, digitalized the agricultural sector, loosened numerous corporate laws to draw FDI, and increased capital spending to support business growth.
In conclusion, the budget has a plan for sustainable development and turning India into an economic giant, and it is both optimistic and realistic. Thoughts?
