Contributing 29% of the country’s gross domestic product (GDP), MSMEs are key stakeholders of the Indian economy. Corroborating this fact, in her budget speech, Finance Minister Nirmala Sitharaman stated that, ‘Entrepreneurship has always been the strength of the Indian economy’.

GlobalLinker spoke to some members about their assessment of the Union Budget and here is what they said.

 “I feel this budget is a ‘foundation laying’ budget, results of which will be experienced in times ahead. Whether infrastructure, agriculture, welfare, nutrition, defense, it touches everything,” believes Krishi Dutt, Joint Managing Director of a reputed film distribution and dubbing studio in Mumbai. He shares, “There is nothing in it specifically for my industry (as of now) but the very fact is that if more money is available in people's hands, the more they will spend—surely on entertainment too. OTT (over-the-top media services offered to viewers directly via internet) will flourish more and this will impact our industry as more work will come to us for localisation.”

Krishi adds, “I also like the idea of two tax regimes as it lets the individual decide what regime to go with and in the long run move towards no exemptions and lesser, simpler taxation."

I feel this budget is a ‘foundation laying’ budget, results of which will be experienced in times ahead. I like the idea of two tax regimes as it lets the individual decide what regime to go with & in the long run move towards no exemptions & simpler taxation. - Krishi Dutt

Co-founder of a tax consultancy company, Vertika Kedia shares that budget 2020 has come up with many changes in direct taxation including change in tax slabs, removal of Dividend Distribution Tax, changes in Section 80G and several more.”

CEO of a financial services firm, Anirudh Gupta opines, “The focus of the budget is to put enablers in place which build the foundations of growth, although this could have been done better. One of the big moves in my opinion is that investments through sovereign wealth funds by way of capital gains and interest is tax-free in the event of the investment being there for three years. The nation could see an inflow investment on account of zero capital gains. This is an interesting trend to watch out for."

With reference to the changes in taxation Anirudh shares, "The current endeavor of the government is like having a traffic cop at a signal to streamline, as we all know it only increases the waiting time as we are seeing on direct taxes as well as in GST. Giving two options in direct taxes is going to be a challenge for taxpayers as well as HR departments for corporates."

He adds, "LTCG (long-term capital gains) needed to have been executed at least at par with real estate capital gains treatment for indexation for two years if not better."

Talking about listing of Life Insurance Corporation as part of government disinvestment initiative, Anirudh says, "In my opinion, when listed the insurance giant may need to distance itself from government directive to help it meet its goals which may be difficult in practice. A better approach is to look at existing listed entities where stake can be brought to 51%."

Also read: Budget expectations: The roadmap for revival

Digital Marketing expert, Sandeep Raut believes that MSMEs will benefit from, “Increase of compliance audit limit from INR 1 crore to 5 crore.” He adds, “Overall taxation is reduced on various points like Income Tax slabs and ESOPs which will definitely help all in the SME sector.”

MSMEs require financial handholding and to that end the extension of invoice financing to MSMEs through TReDs and a scheme anchored by EXIM Bank and SIDBI to handhold MSMEs in exports are welcome steps in the budget. - Neena Narayan

Neena Narayan, founder of a startup focused on hygienic sanitation shares, “MSMEs require financial handholding and to that end the extension of invoice financing to MSMEs through TReDs, a scheme to provide subordinate debt for entrepreneurs of MSMEs and a scheme anchored by EXIM Bank and SIDBI to handhold MSMEs in exports are welcome steps in the budget.”

Founder of an exclusive jewellery ecommerce portal, Sambhav Karnawat shares, “Corporate Taxes have been reduced and Dividend Distribution Tax (DDT) has been removed which should leave more money with companies for reinvestment. That should ultimately help spur growth."

What is your assessment of budget 2020? Share in the comments section below.

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Network with SMEs mentioned in this article by clicking on the 'Invite' button on their profile. Krishi Dutt, Vertika Kedia, Anirudh Gupta, Sandeep Raut, Neena Narayan, Sambhav Karnawat

Disclaimer: This article is based solely on the inputs shared by the featured members. GlobalLinker does not necessarily endorse the views, opinions & facts stated by the members.