With more expectations heading into this new year, the Union budget for the financial year 2022-23 is also the one everyone has their eye on. Also known as the Annual Financial Statement, the Union Budget is presented annually by the Government of India. In accordance with Article 112 of the Constitution of India, this is “a statement of the estimated revenue and expenditure of the Government of India for that year”.
Nirmala Sitharaman, India’s Finance Minister is set to present the Union budget for the financial year 2022-23 on February 1. That said, the micro, small and medium enterprise (MSME) sector is optimistic about it. Below are the top 5 things MSMEs can expect in the Union budget for the financial year 2022-23:
Optimism for the banking sector
NBFC has a vital role to play in complementing the banking sector,
People are optimistic that this year’s budget will provide the much-needed boost to the economy given the slowdown and deterioration from last year’s crisis.
Increased allocation in the health sector
Yes, it is genuine and people have high expectations for this sector in 2022. This includes the allocation in the healthcare sector on the whole infrastructure, where the focus must be on a chain of the Reliable medical cold for the success of any NIP (National Immunization Program). This will ensure that the country will be prepared in advance to fight the pandemic and any other future crisis.
Full Funding of “Atma Nirbhar Swasth Bharat Yojana”
As we all know, last year, the Finance Minister launched – “Atmanirbhar Swasth Bharat Yojana”, with an expenditure of around Rs 64,180 crore over 6 years, with the promise that “Gradually, as the institutions will absorb more, we will commit more”. And, now comes the time when we eagerly await the announcement of full funding to achieve the goals set out in the 2020 National Infrastructure Pipeline.
As we can see, the prices of raw materials are very high and it is not uniform and controlled. In this case, the government should at least streamline the GST on manufacturing for MSMEs. Experts in this area have suggested that the GST for manufacturing should be reduced to at least 12% from 18%.
Recapitalization of the public sector
We are also optimistic about a recovery in overall credit demand in India. There should be a push towards affordable and rental housing and the strengthening of existing financing systems to provide liquidity to stalled real estate projects.
Highlights of the Union Budget 2021-22
● In the Union budget 2021-22 i.e. last year number of measures were taken to support MSME sector and government provided Rs. 15,700 crore to this sector – more than double this year’s BE.
● The budget proposes some changes in favor of MSMEs, including increased duties on steel screws, plastic construction articles and shrimp feed.
● It also provides for rationalization of exemption on import of duty-free items as an incentive for exporters of garments, leather and handicrafts. It also provides for a withdrawal exemption on imports of certain types of leather and an increase in customs duties on finished synthetic gemstones.
It should be noted that Nirmala Sitharaman, the Indian Union Finance Minister, held a pre-budget meeting on December 30, 2021 with all State Finance Ministers. This was part of a series of consultations held ahead of the 2022-23 Union budget.
Hope for the good. Hope for the best.
Author Virendra Ranawat is the co-founder of WoodenStreet. The opinions mentioned are those of the author and do not necessarily reflect the opinions of Greynium Information Technologies Pvtd Ltd.
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Article first published: Wednesday, January 19, 2022, 11:48 a.m. [IST]