Union Budget 2023: Infusion of Rs 9,000 cr in the corpus for MSME credit
- Rs 9,000 crore for revamped credit-guarantee scheme to MSMEs
- Rs 2 lakh crore additional collateral-free credit to MSMEs
- Relief proposed for MSMEs under Vivad Se Vishwas I and II schemes
- Relief to MSMEs, start-ups and professionals through ease of doing business
- National Financial Information Registry to be set up
- Slew of initiative to enhance business activities in gift IFSC
- Public consultation to optimise financial sector regulations
While presenting the Union Budget 2023-24 in Parliament today, Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, proposed to continue the financial sector reforms and innovative use of technology which have led to financial inclusion at scale, better and faster service delivery, ease of access to credit and participation in financial markets.
Credit guarantee to MSMEs
Sitharaman announced that the revamped credit guarantee scheme for MSMEs, proposed in the previous Budget, will take effect from April 1, 2023 through infusion of Rs 9,000 crore in the corpus. “This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of credit will be reduced by about 1%,” she said.
Vivad Se Vishwas I – Relief for MSMEs
Giving significant relief to MSMEs, the Finance Minister proposed that in cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by the government and government undertakings.
Vivad Se Vishwas II – Settling contractual disputes
To settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardised terms will be introduced. This will be done by offering graded settlement terms depending on pendency level of the dispute.
MSMEs and Professionals
Stating that MSMEs are growth engines of our economy, the Finance Minister said that micro enterprises with turnover up to Rs 2 crore and certain professionals with turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation. The Finance Minister proposed to provide enhanced limits of Rs 3 crore and Rs 75 lakh, respectively, to the tax payers whose cash receipts are no more than 5 per cent. Moreover, to support MSMEs in timely receipt of payments, the Finance Minister further proposed to allow deduction for expenditure incurred on payments made to them only when payment is actually made.