The Indian MSME industry is one of the largest sectors contributing around 30% (manufacturing + services) to the GDP of this country. Currently, all unregistered and registered MSMEs:

  • Produce 6000+ products.
  • Employ 120+ million people.
  • Contribute around 45% of the total exports.

The 2019 Interim-Union Budget announced various revisions for MSMEs. The MSME benefits are paramount and will be in favour of this sector considerably. Some of the highlights in this budget that will benefit MSMEs include:-

  1. Interest Subvention: During the presentation of the latest interim budget for 2019-20, Piyush Goel, the Minister of Railways who was temporarily acting as the Finance Minister as well, announced a 2% interest subsidy for MSMEs when they take loans up to Rs. 1 Crore. In addition, he introduced the 59 minutes loan scheme to ensure SMEs and MSMEs get maximum benefits.

  1. Government Sourcing through MSMEs: The second most beneficial announcement made in favor of SMEs is the increase in procurement from Government eMarketplace (GeM). The budget increased the rate to 25%; this will also include a minimum of 3% from MSMEs owned by women.

  1. GST Exemptions: Again, businesses with an annual turnover of up to Rs. 40 Lakh will be exempt from GST. For special category states (Himachal Pradesh and North East), the limit is Rs. 20 Lakh.

  1. Increase in Threshold Limit of Tax on Presumptive Income: Another announcement made which came with this budget was the increase of threshold limit of tax on presumptive income from Rs. 1 Crore to Rs. 2 Crore.