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What can SMEs expect from the Budget 2016-17

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Some enabling initiatives are on the cards, in sync with the Make in India program. Here’s a quick dekko at what the small businesses can expect in this Union Budget.

In a recent post (The New Age SMBs In India Are Ready To Embrace Technology) we had mentioned that the SME industry in India is a very interesting case. The industry employs a major chunk of the total workforce in India (40%), and yet its contribution to the Indian GDP is meagre (17%). With programs like India Aspiration Fund and Make In India, it would be exciting to see how the SME industry shapes up in the coming years. There is a lot of speculation about what would be allocated to the SMEs in the Union Budget to be announced later this month.

Here is our list of what SMEs can expect:

  • Investment towards skill growth: Increased monetary incentives are likely to be given under the Skill India program. This would help small scale businesses to give required trainings to their workforce.
  • More power to technology: A large chunk of capital is likely to be infused into the Technology Acquisition and Development Fund (TADF) to enable SMEs to acquire relevant technologies and support mechanisms.
  • Loan Reimbursements: The Cabinet has already approved a whopping 3,000-crore Mudra Credit Guarantee Fund (CGF). This aims to support small enterprises reeling under loans ranging between 50,000 to 10-lakh.
  • Job Creation: With the SMEs already employing a large chunk of the workforce, greater focus is likely to be given to technology start-ups and traditional businesses, as employment generators.