- MSME in India
The MSME sector in India has exhibited a strong performance and protected the economy from global adversities and shocks. Micro, Small and Medium Enterprises (MSMEs) form the cornerstone of the Indian economy. The Indian MSME sector provides a crucial employment opportunity with low capital requirements. The MSME sector is among the country’s major exporters. Setting up an MSME would provide owners with a job, helping them avoid hunting for jobs elsewhere. It also enables them to create employment opportunities for others.
- MSME Schemes:
The government has introduced many schemes to encourage the micro and small industries. Through schemes such as Micro Units Development Refinance Agency Bank (MUDRA) and Credit Linked Capital Subsidy Scheme for Technology Upgradation (CLCSS), the Central government is boosting the credit availability for the MSMEs.
- Let us have a brief discussion on Prime Minister’s Employment Generation Programme(PMEGP):
- Objective:
- The scheme aims to provide financial assistance to set up self-employment ventures and generate sustainable employment opportunities in rural as well as urban areas.
- To generate sustainable and continuous employment opportunities for rural and unemployed youth as well as prospective traditional artisans and thereby halt occupational migration.
- Benefits:
- Credit linked subsidy program for setting up new micro-enterprise in non-farm sector.
- Margin Money subsidy ranges from 15% to 35% of project cost for projects up to Rs. 50 Lakh in Manufacturing sector and Rs. 20 Lakh in the Service sector. MSME SCHEMES 03 Prime Minister’s Employment Generation Programme(PMEGP) Objective: To generate sustainable and continuous employment opportunities for rural and unemployed youth as well as prospective traditional artisans and thereby halt occupational migration.
- For beneficiaries belonging to Special categories such as SC/ST/ Women/ Minorities/ Ex-Servicemen/ Transgender/ Aspirational districts/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas.
- Scheme applicable for:
- Any individual, above 18 years of age can apply.
- How to apply:
For eligibility, application process and other process, please get in touch with us.
MSME Budget 2023:
Changes In Presumptive Taxation Rules:
- While speaking about the presumptive taxation rules, the FM further proposed to deduct the expenses incurred on payments received from buyers, if such payments are directly made to MSMEs.
- To enable MSMEs to receive timely receipt of payments from buyers, the FM announced that buyers may not claim deductions unless they pay the MSMEs first.
- This mandate by the FM, is intended to force buyers to make timely payments and clear the pending dues owed to small business.
MSME Corporate News:
- SIDCO to launch two plug-and-play facilities for MSMEs in Chennai
Tamil Nadu Small Industries Corporation Ltd. (SIDCO) will soon launch plug-and-play infrastructure to the tune of about 2.8 lakh sq ft for MSMEs in Chennai, according to V Arun Roy, Secretary-MSME Department, Government of Tamil Nadu.
“The Tamil Nadu government is one of the pioneers in creating many infrastructure schemes like industrial estates. The State is also implementing plug-and-play facilities for MSMEs. SIDCO will open two plug-and-play facilities for MSMEs, one each in Ambattur and Guindy. These are expected to be opened in June this year,” Roy told businessline on the sidelines of the “India Manufacturers and SME Summit,” organised jointly by the SME Chamber of India, the SME Export Promotion Council, and the Federation of Indian SME Associations here.
In Ambattur, a 1.31 lakh plug-and-play unit will come up on a 1.6-acre site. The four-story facility will offer a total saleable area of 107,936 sq ft for MSMEs.
In Guindy Industrial Estate, a 1.48 lakh sq ft plug-and-play center will come up on a 1.27-acre site and it will have six floors with each floor having a space of 24,695 sq ft.
The manufacturing sector will play a crucial role in achieving Tamil Nadu’s vision of becoming a $1 trillion state economy by 2030. So, MSMEs could continue to invest and grow in the state. MSMEs could grow organically and build linkages across the country. Plug-and-play facilities will be one of the key enablers, and the government is trying to make those facilities available even in the existing SIPCOT Industrial Estates, said S Krishnan, Additional Chief Secretary-Industries, Government of Tamil Nadu.
Earlier, two initiatives—the Women Entrepreneurs Development Council and the Tamil Nadu Business Forum, a networking business platform—were launched at the Summit. (To read more – Click Here)
2. No growth for 72% of MSMEs in 5 years: Survey
Despite steps taken by the government to ease credit flows to the MSME sector, a new survey has revealed that majority of respondents felt the performance of their business has either remained stagnant or declined and access to credit remained a key challenge.
The survey by industry body Consortium of Indian Associations of 0.1 million entrepreneurs also revealed that during the last five years, the performance of 72% of the respondents is either stagnant or decreasing or stopped or wound up. “Only 28% of the respondents have confirmed that they are growing. This is a warning sign,” it highlighted.
Though the government has been talking about the ‘ease of doing business’, micro entrepreneurs continue to be governed by complicated and outdated laws and dispensable compliance burdens,” CIA said. Given this, the Association feels that the government should revisit, scrap or re-draft these laws,” it further said. It has also proposed that the government should amend the MSME Development Act, 2006 to strengthen state facilitation councils and also make changes to the GST Act to make it more friendly to small businesses.
The survey also revealed that 79% of the respondents felt that access to bank finance remains a big issue faced by entrepreneurs. As many as 42% respondents cited profit margin concerns as one of the main challenges for entrepreneurs, 70% are worried about delayed payment receipts and 40% on raw material price and availability, 52% find adherence to statutory compliances is tough, 62% are worried about demand and order book position and 38% have fear of manpower sourcing and employability skills in the youth. (To read more – Click Here)
3. U.P. govt signed 8,829 MoUs with MSMEs during GIS
LUCKNOW The Uttar Pradesh government has signed 8,829 MoUs worth over ₹1.37 lakh crore with MSMEs at the recently-concluded Global Investors’ Summit.
According to the MSME department, 6,212 MoUs are worth less than ₹10 crore. These pacts will bring in a total investment of ₹26,124 crore. In addition to this, 938 other MoUs are worth less than ₹20 crore but higher than ₹10 crore. These agreements will bring a cumulative investment of ₹15,341 crore.
Similarly, 451 MoUs are in the range of ₹20 crore- ₹30 crore. These are valued at ₹11,956 crore. According to the state government, U.P. currently has 95 lakh registered MSMEs. The three-day investors’ summit concluded on February 12.
Ease of Doing Business for MSMEs: While the target of Rs 1.25 lakh crore was set for the MSME sector, the Uttar Pradesh government signed 8,829 MoUs worth Rs 1.37 lakh crore with investors, said the state government. (To read more – Click Here)
4. Odisha amends food processing, MSME development policies
The state government has issued a notification amending Odisha Food Processing Policy 2013, Odisha Food Processing Policy 2016 and Odisha Micro, Small & Medium Enterprises (MSME) Development Policy.
The state government has issued a notification amending Odisha Food Processing Policy 2013, Odisha Food Processing Policy 2016 and Odisha Micro, Small & Medium Enterprises (MSME) Development Policy.
“To avail financial incentive under these 3 policies, an industrial unit was required to submit an application within 6 month/12 month from the date of commencement of operation. Since there was no provision for condonation of delay beyond the stipulated 6 month/12month period, claims of a number of industrial units for financial incentive, submitted beyond the stipulated period of 6 month/12 month with delay of a few days, have been rejected”, the notification issued on Thursday noted.
With the amendment, the stipulated period has been enhanced to 2 years. Secondly, a provision for condonation of delay beyond 2 years has also been inserted. Moreover, as a one-time relaxation measure, industrial units whose claims have already been rejected due to delay in submission, will now get time up to 30 June 2023 for filing fresh claims to avail financial incentive, it added. (To read more – Click Here)
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Important Industry Update:
- Industry Association COSIA asks govt to review GST levy on land lease transactions
Ease of Doing Business for MSMEs: Under GST, the initial lease of land from MIDC to the industry is exempt, but there was no specific exemption granted for further assignment of leasehold rights. This amount would come across as a huge expense for the MSMEs and could break their back.
The small industry body, Chamber of Small Industries Association (COSIA) has appealed to the central government to review the issue of Goods and Services Tax (GST) on leased land affecting MSMEs across the country, reported PTI on Thursday.
COSIA president Sandeep Parekh in an official release wrote that the GST department has put the industry in a state of fear by sending summons and starting an investigation on the transfers of leased lands in the MIDC (Maharashtra Industrial Development Corporation) area since July 2017.
The report said that the GST department seems to be taking action after almost five years that the transfer of leased land from one party to the other comes under the purview of supply of service and hence 18 per cent is leviable on the transaction, though MIDC is exempt, the report said.
If this continues, then it will gravely impact the MSMEs across the country who have sold their plots post July 2017 and also all future sales as well.
Thousands of units in Maharashtra have not paid GST on the assignment of leasehold rights of such land taken on lease from MIDC based on the understanding that “assignment of leasehold rights in land” is akin to “sale of land” and such transactions fall under Schedule III of the CGST Act on which GST is not payable, it said.
The report further added that the units have paid stamp duty as per the sale of land, and also paid the income tax on short-term and long-term gains considering it as deemed ownership and the premium is paid to MIDC for transferring the lease.
COSIA along with other associations in the country are taking up the case with the respective state governments and the central government.
“We have written to all the concerned departments and requested to amend/clarify the GST rule for the long term lease with retrospective effect and give relief to the thousands of MSMEs from all over India by considering it in schedule III,” COSIA said.
- Source : Click Here
How we can help MSMEs?
- Choose Best Business model
- Choose suitable business form
- to choose the most suitable source of funding
- Claims / recovery matters filings
- Agreement / contracts vetting & preparation
- to approach financial institutions to get funds keeping in view their specific schemes.
- Evaluate and compare the terms and conditions, including rate of interest and repayment period of loan offered by the different financial institutions
- Select the financial institution, which offers funds at minimum interest rate as per Entrepreneurs repayment plans.
- Arrange / Prepare set of documents as required for getting Loan.
- Prepare application in prescribed proforma and has to be submitted along with project report including proof of ownership/availability of land/building, proof of residence, collateral securities (wherever applicable) etc.
Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information. Many sources have been considered including newspapers (ET, BS & HT etc.)
