Look what longest budget speech in history had for MSMEs & Start-ups

Want to know the important pointers of the budget speech Take the help of Husys It has listed all the primary announcements made by the Finance Minister to helps startups

While tabling the Union Budget 2020 in the parliament, Finance Minister Nirmala Sitharaman threw light on 8 main areas- Aspirational India, Economic Development, Caring Society, Paradigm shift in Governance, Financial Sector, Fiscal Management, Direct & indirect tax.

With delivering the longest Startup budget speech in history, Nirmala emphasized on providing relief on working capital requirements for MSMEs and easing the peculiarity of ESOP (Employee Stock Ownership Plan) for startups.

Below are the major announcements made by Finance Minister, we can compare it with the previous tax provisions 2019-20 here

What we got for SMEs? Let’s have a look!

Invoice Financing

To improve the cash flow within the SMEs, Sitharaman reiterated that invoice financing app will be launched. Businesses will be able to borrow funds through invoice financing equivalent to the amount due from their customers.

This will not only help in having cash flow in an organization but aid in payment of services, assets, salaries, and others. Before, the businesses were required to wait for the payment from the customers’ side.

Turnover Threshold for Audit

Present Scenario: Businesses that have a turnover of more than 1 crore are required to get their accounts audited.

After the budget 2020: Sitharaman has proposed to raise the threshold to 5 crores which will reduce a lot of burden on small enterprises. Perhaps, this would be only beneficial for businesses that hold less than 5% of the transaction in cash.

1. GeM or Government-e-Marketplace

GeM is a platform where the procurement of goods and services takes place & is looking forward to enabling & creating a single platform for the same. Finance Minister added that the present government has proposed to increase its turnover to 3 lakh crore.

1. Restructuring of debts

RBI had permitted the restructuring of debts till March 31, 2020, last year. This year, the government has proposed to extend the window for 1 year that March 31, 2021, so that a large pool of MSMEs can benefit.

1. 10% reduction in overall tax incidence

The Finance Minister paid homage to Arun Jaitley by calling him the architect of GST and how it has benefited MSMEs by way of enhanced threshold & composition limits. Sitharaman added that effective tax incidence on almost all commodities came down & it amounts to a 10% reduction in overall tax incidence.

She also briefed about how GST faced certain hurdles during the time of maturing and how the GST council has always been dynamic & motivated towards it.

1. Single window e-logistics market

Sitharaman said that national e-logistics policy will be released soon & the roles of Union, State, & Key Regulators will be clarified in the same. She also reiterated that a single window e-logistics market will be created which will benefit MSME & make them more competitive, generate employment, & boosts the skills of people.

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