Union Budget 2020 was announced by Finance Minister Nirmala Sitharaman on Saturday. One of the primary focus of Budget 2020 was expected to be Micro, Small and Medium Enterprises (MSME). Addressing the concerns of MSMEs was crucial towards reviving the economy amidst a global slowdown. And the budget, as expected, focused significantly on this front.
Nirmala Sitharaman said in her Budget 2020 speech that over 5 lakh MSMEs have benefited from the debt restructuring mechanism put forth by her government. The Government has also asked the RBI to extend the debt restructuring window for MSMEs by a year. It had a deadline of March 2020 which has now been extended. The Finance Minister also announced that amendments will be made to enable Non-Banking Financial Companies (NBFCs) to extend invoice financing to MSMEs.
A great deal of attention was given to MSMEs in last year’s interim budget as well. A 2% interest subvention was announced for MSMEs that had taken a loan of up to Rs. 1 crore. Acting Finance Minister Piyush Goyal had stated that the government had increased the share of government procurements from MSMEs through Government eMarketplace (GeM) to 25 percent, including 3 percent from MSMEs run by women.
It was also announced that businesses with an annual turnover of up to Rs. 5 crores, comprising over 90% of GST payers, will be allowed to file quarterly GST returns. The Government also abolished duties on 36 capital goods. The GST council was asked to devise ways to reduced GST for homebuyers.