The Union Budget 2017 is just days away. As Finance Minister Arun Jaitley gears up to deliver his budget speech on February 1, 2017, the nation is debating what to expect in the budget.
Demonetization was a big move that hit small businesses hard. The Union Budget 2017 is supposed to soothe rashes of the cash-crunch and have tons of goodies for small-scale businesses.
Let’s look at some of the predictions SMEs should look forward to in the Union Budget 2017:
1. Tax Cuts
The union budget 2017 is expected to be big on tax sops for corporates as well as individuals. With the onset of Goods and Services Tax (GST), expect big exemptions in the investment allowance sector- especially for the manufacturing and agriculture sector in line with the “Make in India” campaign.
The current corporate tax of 35% could drop to 20%, according to a Knight Frank report. The government could also consider increasing the no-tax bracket for new startups to 5 years and capital gains taxes could be exempt if you are investing in a startup.
2. Focus on SMEs
Since small and medium sized enterprises employ more than 90% of the working class in India and contribute to half of the country’s GDP (Gross Domestic Product), expect a MSME-friendly budget: funds for infrastructure, R&D and other initiatives that facilitate growth.
“The budget which finance minister Arun Jaitley will present on 1 February needs to have a different and singular objective. Demonetisation has left people feeling low and tired. While it is effecting one kind of behaviour change, towards cashless transactions, it is also encouraging the hoarding of cash and forcing people to defer expenditure. Consumer, business, and investor sentiment are all down. The budget needs to change all that.”
– R. Sukumar, editor of Mint wrote in a recent piece.
3. Digital/Online Payments & Transaction
Demonetization was clear evidence of the fact that the government is steering the country towards a cashless economy.
Expect the union budget to launch more initiatives to promote digital/online payments. Earlier last year, the finance ministry announced a tax rebate for businesses that transacted online.
Experts expect digitization to not just boost job creation but also spur growth.
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