Modi’s mudra floors SMBs

Finance Minister Arun Jaitley in his Budget speech announced a major change in corporate taxation rules. Companies with a turnover of less than Rs 250 crore in FY17 would be required to pay tax at 25 percent (and not at the erstwhile rate of 30 percent) in FY19. Out of 4,721 Indian listed companies that reported their numbers for the year ended March 31, 2017, 963 companies (20.3 percent of the total) could be major gainers.
The median tax rate for the above companies is approximately 34 percent for FY17. Consequently, the difference in tax rate (to the tune of 9 percent) is expected to improve their profit after tax margins, thus leading to better earnings visibility.

R. Narayan, CEO Power2SME

“The government’s intent of promoting ‘ease of doing business’  among MSME players was evident in the announcements made
by FM Arun Jaitley for MSMEs. With major focus on improving
lending in the MSME sector, the government has announced a
number of measures to ease the lending process and has also
addressed to improve loan accessibility for MSMEs. The allocation
of Rs 3 lakh crore for lending under Mudra and reduction of the corporate tax to 25% for small companies with annual turnover of up to Rs. 250 crore will definitely boost the sector financially and help the MSME’s grow their businesses more efficiently.”

Rohit Manglik, CEO, EduGorilla

“The budget will spell a turnaround for the startup ecosystem. The slew of initiatives such as lower corporate rate for small enterprises,
the increased turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act for assessees in MSME category will go a long way in giving a fillip to startups."

Sunita Maheshwari, Co Founder, StartUp Arena

“Union Budget 2018 is a mix for SME’s. Increased Wi fi connectivity across connects penetration of rural markets which is a good sign. Budget also talked about Government financing EPF contribution
for new employees. This will reducing manpower costs SMBs who are in the growth mode, and who normally employ first time job seekers. Doubling of outlay to the mudra scheme along with easing of complex requirements for availing the loan should go a long wa y in boosting the startups and SMBs growth story.”

Neerav Jain, Founder & CEO, CityFurish

“This year’s budget emphasis on Startup India and Make in India campaign is a welcoming move by the government. A 25% Reduction in corporate tax for MSMEs with revenues upto Rs 250 crore is a good move and will further strengthen this segment. Introduction of additional business reforms under the Startup India program will further ease the journey of startups, and will boost investments in the overall ecosystem.”

Ashish Bahukhandi, Founder & CEO, Apps Discover Technologies

“This budget set to play a key factor in stimulating the growth aspect of the digital advertising industry. Government’s decision of installing 5 lakh Wi-Fi hotspots in rural areas for easy internet access will help digital advertising in enhancing its reach even in rural areas. Speaking about the much-anticipated corporate tax, he said with 25% tax cut on companies with an annual turnover
of 250 crores will be a crucial factor in fostering the growth rate of MSME’s (Micro Small Medium Enterprise). Companies like ours will now be able to look further in the direction of expansion as the relaxation in tax slab is a huge relief for us.”

Sanjay Swamy, Managing Partner, Prime Venture Partners

“SMEs and consumers have a massive credit gap – digitisation & collaboration between government, PSU, Private Sector and Startup ecosystem is key – and I am glad to see specific initiatives address these aspects. Government should do more to encourage fintech/startup ecosystem – and one of the most important ways is
to by becoming an early adopter of these solutions.”

Gaurav Hinduja (R) and Sa shank Rishyasringa (L), Co-founders of Capital Float

“The recapitalization of the PSU banks up to Rs 5 lakh crores and allocation of Rs 3 lakh crores in MUDRA loans ensures a higher availability of formal finance for credit-starved MSME segments. Another huge step towards boosting the growth prospects of MSMEs is the reduction of corporate tax to 25% for enterprises with a turnover of up to Rs 250 crores.The extension of Kisan Credit card to fisheries & animal husbandry farmers and the allocation of Rs.10,000 crore for fisheries & aquaculture, animal husbandry funds further adds to the Government’s efforts towards absorbing more segments into the formal financial ecosystem.”

Manav Jeet, MD & CEO, Rubique

“The Union Budget 2018 is Providing Infrastructural Support to MSMEs. Allotment of Rs 3 lakh crore for lending in FY 19 under PM’s MUDRA Yojana for MSMEs definitely bring cheers to
them. Also government’s initiative to focus on process digitization & easing the loan sanctioning process will help & encourage the emerging fintechs like us which are taking efforts to digitize the ecosystem with increased acceptance by the ecosystem. Although these initiatives will definitely help Fintech companies like us expand
& help bridge the credit gap for MSMEs”

Nikhil Rungta, MD, Intuit India

“This budget not only provides small and medium enterprises easier access to their working capital requirements but also highlights the importance of the role of online fintech lending companies. In the last year, while GST has been hailed as a much-needed overhaul of the indirect tax system, many small and medium sized businesses (SMBs) across sectors are still adapting to the new tax regime . Of the 51 million SMBs present in the Indian market, around 20 per cent are somewhat digital-savvy. Since the government is highly supportive of making India digitally tax-compliant, this budget will help small business by making it easier.”

Rahul Garg, CEO & Founder, Moglix

“The Union Budget 2018 is a very inclusive and progressive budget for all of us. It is indeed heartening to see that major emphasis has been laid on improvising social security, healthcare and education for everyone down the pyramid. We welcome the focus on strengthening the MSME sector in the form of capital support and
interest subsidy. Investment in infrastructure would help strengthen the overall geographies of India and make it true to ease of living and doing business in the country.”

Limesh Parekh , CEO, Enjay IT Solutions

“Apart from other regular things, there are few steps which actually show the intent and vision of the government. Few Examples: Progress towards Universal Health System nationwide. MSME reforms and PM Mudra Yojana Wil enhance effectiveness of small enterprises, strengthening of railways and powerful agricultural policies will enhance and strengthen agricultural backbone of Indian economy, programs for preventing brain drain and BEd programs for technical teachers is a good step.I think above steps proves that current government is concerned about building great Nation.”

Chander Agarwal, Managing Director, TCIEXPRESS

“We welcome government’s decision to allocate of Rs. 5.35 Lakh crore to develop 35,000 km under phase 1 as part of Bharatmala project. We also welcome other important initiatives like the decision to boost the MSME sector by allocating Rs 3,794 crore in the form of capital support; initiative to set-up National Logistics Portal as a single online window to link all stakeholders and decision to allocate Rs 2.4 lakh towards smart cities development will push the need for
express companies like TCIEXPRESS.”

Ritesh Agarwal, Founder & CEO, OYO

This year’s Union Budget stood we have a network of over 3500 exclusively controlled hotels in the MSME sector and we believe that the budget presented today will facilitate the growth of our partners. The Mudra Loan allocation of Rs 3 lakh crore will help in enabling SMEs to generate more jobs while creating thousands of new
entrepreneurs too. The reduction of corporate tax is a welcome move but we are hoping the limit to be pegged higher than INR 250 crore so as to benefit more corporate entities.”

Dr. Raghupati Singhania, Chairman & MD, JK Tyre & Industries Ltd., and VP, JK Organisation

“The allocation of nearly Rs. 15.7 lac crores to this sector, which is almost 10% of the GDP, is many times higher than that in the previous year. The various measures to put in place a mechanism to
boost farmers’ income, higher credit for agri sector, creating clusters for horticulture crops and supporting food processing, will give a tremendous boost to agro rural economy. The credit support and lowering of tax rates for MSME sector will indeed boost the sector which plays an important role in the economic activity of the country.”

Rakesh Dubey, President, Microfinance Institutions network

By introducing incentives for MSMEs in the form of capital support and corporate tax reduction to 25% for companies with turnover under Rs 250 crore, government will encourage small entrepreneurs in both urban and rural areas. Clubbed with increased target for MUDRA Yojana for this year, it will encourage small and medium entrepreneurs to expand their businesses. Government’s decision to review refinancing policy of MUDRA for better financing of NBFCs is a good news for NBFC-MFIs.”

Sanjay Sethi, CEO & Co-founder, ShopClues

“With a deep focus on the social sector, this year’s budget has
ensured that India will be clocking a healthy growth rate. We
are happy that, Finance Minister has given a boost to infrastructure
spends and to the MSME sector. The MSME sector is the backbone of our economy and this boost by the government will ensure higher production and consumption.With afocus on technology, the Finance Minister has provided great support to the digital industry. The government’s decision to create 500,000 wifi hotspots in rural India will enable broadband access to those with no or little access to the realm of the internet.”

Geetika Dayal, Executive Director TiE Delhi-NCR

“Taking the lead from last year, this year’s budget did not have much for the Indian startup sector, it still holds a lot of promise. However, the government has reinstated its support to the MSME sector with INR 3 lakh crores being allotted to the MUDRA Yojna revamping easy loan facilities for the beneficiaries. which is likely to cost govt around Rs 50,000 crore annually and INR 50 lakh crores to improve infrastructure, promoting SME’s interest in sectors that
directly contribute to the growth of our country.”

Viral Berawala, Chief Investment Officer, Essel Mutual Fund

“Overall - Popular but not populist budget. Budget has targeted a large section of population through govt funded healthcare, increase in agri incomes and tax relief & funding (MUDRA) for SME and MSME. Fixed income view - Incoming bond supply, inflation, govt revenues and liquidity will drive bond markets in times to come. For now we see no reason to change our current view of staying invested in accrual driven products. On introduction of LTCG we don’t see significant change in investor behaviour.”

Brijesh Parnami, Executive Director & CEO Essel Wealth Zone

“A well balanced and so called populist budget keeping in mind the medium to long term economic growth of the country. Agricultural
& Rural section of country as logically envisaged got the maximum focus as it is a priority area for the government. Covering 50 crs. lives under national health program is an iconic step and it’s the biggest in the world, done by any government. Lower tax rate for MSMEs would strengthen the sector further and would boost job creation opportunities.”

Alok Mittal, CEO, Indifi – a technology and data platform

“The recognition of online lending as a key driver to MSME credit is welcome, and we at DLAI will look forward to working with the government to enable this.”