The Finance Minister, Smt. Nirmala Sitharaman announced the Union Budget 2022-23 on February 1, 2022.
The Budget 2022-23 provides benefits for the Startups and Micro, Small and Medium Enterprises (MSMEs) in India.
The key announcements in the Union Budget 2022-23 for Startups are provided below:
Union Budget 2022 Announcements for Startups
1. The Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications for Drone-As-A-Service (DrAAS). In The select ITIs in all States will start courses for skilling in required disciplines.
2. Defence R&D budget has been opened up and 25% of the Defence R&D budget has been earmarked for startups, Industry and academia.
3. National Bank fir Agriculture and Rural Development (NABARD) will be provided funds raised under the co-investment model to finance startups for agriculture and rural enterprises relevant to the farm produce value chain. Such startup activities will include supply of machinery for farmers on a rental basis, technology support for Farmer Producer Organisations, including IT support.
4. Taxation Benefits Provided to Startups in Union Budget 2022. Eligible startups established before 31.03.2022 had been provided with a tax incentive for three out of ten consecutive years from its date of incorporation. The Finance Minister proposed the extension of the period of incorporation of the eligible startup by one more year, i.e., up to 31.03.2023, to provide such a tax incentive.
5. The Government had introduced a concessional tax regime of 15% tax for newly incorporated domestic manufacturing companies to establish a globally competitive business environment. The Finance Minister proposed extending the last date for commencement of production or manufacturing under Section 115BAB by one year, i.e. from 31.03.2023 to 31.03.2024.
6. The Finance Minister also gave an extension of customs duty exemption for another year to steel scrap to grant relief to MSME steel producers using steel scrap.
Union Budget 2022 Announcements for MSMEs
1. The Finance Minister proposed the interlinking of the Udyam, NCS, e-Shram, and ASEEM portals and to widen their scope to perform as portals containing live, organic databases providing B2C, G2C and B2B services. These services will relate to skilling, credit facilitation and recruitment to further liberalise the economy and increase the entrepreneurial opportunities for all.
2. The Emergency Credit Line Guarantee Scheme (ECLGS) has been extended till March 2023, and its guarantee cover will be increased by Rs.50,000 crore to a cover of Rs.5 lakh crore focusing on hospitality and related enterprises.
3. The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be provided additional funds. It will get additional credit of Rs.2 lakh crore for micro and small enterprises and will expand employment opportunities.
4. The Raising and Accelerating MSME Performance (RAMP) programme will be provided with funds of Rs.6,000 crore over five years. The RAMP program is expected to help the MSME sector become more competitive, resilient and efficient in addressing the needs of the Indian economy.
The Writer is a Practicing Company Secretary with more than 30 years in project consultancy. He can be contacted for queries or assistance at the following address:
CS Joseph Sequeira
B.Com, LL.B, FCS, MICA
Practicing Company Secretary
Email : josephcf@yahoo.com
Phone: +91 8380087153.
Website: www.csjoseph.in
Disclaimer
The information given in this document has been made on the basis of the Union Budget 2022 pronouncements appearing in the news. The information in this document is for general informational purposes only. It is not a legal advice or a legal opinion. One should seek the advice of a suitable legal counsel before acting upon any of the information in this document. We are not responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document.
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