The improving SME landscape in India is a testament to the efforts of the government through the years. In the past, applying for funding or availing loans for SME’s was no easy task. To help with this issue, the Government of India and the Small Industries Development Bank of India (SIDBI) set up the Credit Guarantee Fund Trust for Small and Micro Enterprises (CGTMSE) in August, 2000 under the Credit Guarantee Scheme (CGS). The CGTMSE was introduced with an intention to allay all issues surrounding loans and funding within the small, micro and medium enterprises segment. The scheme sent out directives to banks wherein they were required to sanction loans of up to Rs.1 Crore without collaterals or third party guarantee to SME’s. While the introduction of the scheme brought about some much needed changes within the sector, there were still a number of shortfalls.
It’s common knowledge that businesses face cash crunches and issues with capital from time to time. With money issues comes a myriad of other issues that may lead to defaulting of loans and economic offences. Such issues can come knocking on your door anytime, whether you are a seasoned businessman or a first time entrepreneur. And nobody wants to find themselves tagged as a “big time” economic offender. So what can you do to ensure that you don’t find yourself in such a situation?
The Budget focussed on bringing about a sustainable change for the country by promoting a more digital economy, ease of doing business, introducing measures to help the rural and agricultural sectors through NABARD and creating opportunities for the youth. Here are the key highlights for businesses from this year’s Budget session.
The Small, Medium and Micro Enterprises (SME’s) industry in the country is teeming with a multitude of businesses. The government has introduced a number of schemes to empower this sector and encourage indigenous products. However, these businesses are often oblivious to the variety of schemes running and lose out on substantial benefits. One such scheme that helps with tax saving is the R&D Tax Credit Scheme that was introduced to encourage small businesses to take risks and invest in research and development (R&D).
In a country riddled with bureaucracy and corruption, a move by the government in 2006 that promised support to the MSME industry was a breath of fresh air. The Micro, Small and Medium Enterprises Development Act (MSMED Act) of 2006 was enacted with great hope and promise. Its primary aim was to promote and develop this nascent industry while increasing competitiveness within it. It’s been a decade since, but has the act really benefitted SMEs in India?
The MSME industry in India contributes to almost 40% of the gross industrial value. As a result of this, it has an extended support system from the central and state governments these days. In an effort to further simplify the processes within the industry, the Udyog Aadhaar registration was introduced. The Udyog Aadhaar (UA) is nothing but an ID for your business much like the Aadhaar cards we have for ourselves. It’s a 12-digit number that helps the government identify your company and gives you a slew of benefits under the MSMED Act of 2006.