Budget 2021 is one of the most eagerly awaited budgets of recent times and the Finance Minister will be presenting the budget on the first of February. With the recent pandemic outbreak and the resulting lockdown have had a massive negative impact on the growth of the country and its economy, there are high hopes for budget 2021. Individuals from all walks of life as well as corporates are looking forward to what all will be included in the budget and everyone in general are expecting various reforms as well as measures that will be focused on reviving the Indian economy and getting the country back on track for constant economic development. With the growth of the economy being poor over the course of the pandemic, companies of different sizes and industry segments have faced the brunt of the economic impact brought in by the pandemic.
With that said, the MSME sector which has been the backbone of India’s economy has had it hard starting from the early days of 2020 and with most MSMEs lacking the resources and financial capacity to deal with the economic backlash caused by the pandemic, many companies have had to shut down their operations. MSMEs also are keen on the various measures that will be included in the upcoming budget presentation and small and medium businesses have clear expectations from the budget. Some of those expectations and the issues that they believe will be resolved through budget 2021 are given as follows.
These are some of the various expectations that MSMEs have on budget 2021 and with the economy gearing up for the post pandemic world, reforms to revive the sector will have a major say in the immediate development of the sector
- Controlling the Economic Fluctuations: Small and medium sized businesses are expecting that reforms will be brought in to control the economic fluctuation that is more likely to expect in the post-pandemic world. So, by ensuring that the government can control the pricing of the product and by controlling the amount of money being circulated in the economy, MSMEs and the common man are hoping that there will be no massive economic fluctuations at least not in the immediate future.
- Plans to Extend the Credit Facilities: Even with the fact that MSMEs have made worthy contributions to exports as well as the labour-intensive employment, the various issues that they have faced when it comes to usage of formal credit and its limited availability have been largely overlooked. To address this issue, government should focus on infusing liquidity through one-time bank credits. With that said, the RBI also has a massive say regarding this issue. Another two parties that should play an active role when it comes to extending credit to MSMEs are Banks and NBFCs.
- The Further Reduction of Tax Burden: This is yet another important expectation that MSMEs have on the upcoming budget presentation. The tax rates might need changes to accommodate the various needs of MSMEs so that they only need to pay less in taxes. The Finance Minister have the opportunity to relook at the tax exemption limits as well as the tax slabs and if the tax rates are reduced, it will be yet another big positive for small and medium enterprises.
These are some of the various expectations that MSMEs have on budget 2021 and with the economy gearing up for the post pandemic world, reforms to revive the sector will have a major say in the immediate development of the sector.