ARTICLE AD BOX
New Delhi: Union Finance Minister Nirmala Sitharaman presented her ninth budget today, February 1, making a series of announcements aimed at encouraging entrepreneurship through the Government’s Sabka Saath, Sabka VIkas clarion call. In her speech, the finance minister focused on three kartavyas-
- Boosting economic growth
- Fulfilling aspirations of Indian people and
- Boosting access to resources and opportunities for everyone
For the various startups aiming to meet these goals, the Finance Minister has allocated Rs.10,000 crores to MSMEs under the MSME Growth and Resilience Fund, where companies can access credit quickly, mostly to meet tight delivery deadlines. This has been a major challenge for MSMEs, as delay in access to credit has been a big challenge for them, resulting in missed opportunities.
The government aims to sweeten the deal by doubling the credit guarantee cover to Rs. 20 crore, and reducing the fees for the same for 27 priority sectors.
Many DPIIT recognized startups will continue to enjoy their 100% income tax exemption for three years from their first ten years of incorporation. In her speech, Dr Sitharaman has also promised to ‘clean up’ their pending litigation and legacy cases pending after the ‘angel tax’ was abolished last year.
The Finance Minister has also promised to oversee the proposals for simplifying customs and central excise duties, as this has remained the last pending tax reform following the simplification of GST and Income Tax.
To minimize shipping delays, the customs department is looking to roll out the Customs Integrated System (CIS), consolidating all custom processes on a single, integrated platform within 2 years.
Sector specific announcements
The Finance Minister has nearly doubled the allocation under the Electronic Component Manufacturing Scheme (ECMS) to Rs.40,000 crore, aiming to boost employment and exports following the success of the Production Linked Incentive (PLI) scheme.
To boost research and development in healthcare, the Budget has allocated Rs.10,000 crore to Biopharma Shakti, a program aimed to support such initiatives.
Furthermore, the government is clubbing IT enabled services, including software development, contract R&D and knowledge process outsourcing, into a single category named as the Information Technology Services.
One of the biggest announcements has been the introduction of a tax holiday until 2047 for foreign companies providing global cloud services using Indian data centers.. This is aimed to help India become a global hub for data processing, even as the demand for data centers has skyrocketed over the years due to the use of AI.
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