The Union Budget 2019 was announced today. The Finance Minister, Nirmala Seetharaman, announced the first Union Budget after the new Government got elected in May. The MSME sector set high expectations from the Union Budget 2019.
MSMEs saw a disappointing turnout in the Interim Budget presented in March. With the new Union Budget July 2019, there were high hopes to see better incentives and cheaper finance from the Government.
Let’s check out the key takeaways from the Union Budget 2019:
The Finance Minister opened the session by addressing the growth of India’s economy from a $ 1.27 trillion dollar economy to a $ 2.7 trillion economy this May. She also predicts the country can expect to become a $ 5 trillion-dollar economy by 2025.
Top Highlights of the Union Budget 2019:
Ease in GST Rates of 92,000 Crore:
GST rates have been eased for businesses with a relief of up to INR 92,000 crore provided during the year. Other GST measures include easier filing of returns and tax compliance. Additionally, a simplified single monthly return is now being ruled out. A 2% SOP will be provided for GST-registered businesses.
Most importantly, taxpayers with an annual turnover of less than Rs 5 crore will have to file only quarterly returns. FY-20 GST revenue target has been set at Rs 6.6 lakh crore including CGST of Rs 5.26 lakh crore, notably.
Also Read: An Infographic Guide to GST in India
Recapitalise Public Sector banks to strengthen lending capacity:
Public sector bank shares jumped up 5% as the Government agreed to add funds unto Rs 70,000 crore. Certainly, this was done to strengthen the banks and increase their lending capacity for small businesses.
Levying 2% tax for over Rs 1 crore ATM Withdrawals:
In its continuing bid to promote digital payments and to discourage the practice of making business payments in cash, the government proposed to levy TDS as much as 2% on cash withdrawal exceeding INR 1 crore in a year from a bank account.
Also, businesses with an annual turnover of Rs 50 crore must make use of BHIM, UPI, Aadhaar Pay, NEFT, RTGS for payments. Also, businesses will have to use these modes of payments with no charges or an MDR (merchant discount rates) will be imposed on customers or merchants.
Loans of up to ₹1 crore to be given to MSMEs for ease of access:
As part of its larger scheme to ease credit access for the MSME sector, the Government will enable loans of up to 1 crore for all MSMEs. Besides this, the Government will also create a payment platform for MSMEs to enable them to pay bills and save time.
Other key highlights:
- The Government will extend pension benefits to 3 crore retail traders and shopkeepers who have a revenue of less than ₹1.5 crores. This will be called the PM Karam Yogi Maan Dhan scheme.
- Proposal for a television channel exclusively for startups and businesses.
- Women self-help groups will expand across all districts. In addition, one woman in every SHG will have access to loans up to Rs. 1 lakh under the Government’s Mudra Yojana scheme.
- Startups will not be required to justify the fair market value of shares issued to investors in Category II Alternative Investment Funds.
Did the budget meet your expectations? Tell us your thoughts in the comments below.