Budget for Entrepreneur :Impact

Analysis

Presented for: Presented by:

Dr. Navita Nathani Apoorva Agarwal
Kashish Gupta
Purva Sharma
Shikha Bansal
 Introduction

 A person who sets up a business or businesses, taking on

financial risks in the hope of profit.
 Entrepreneurs play a key role in any economy. These are the
people who have the skills and initiative necessary to anticipate
current and future needs and bring good new ideas to market.
 Budget 2018-19

 Finance Minister Arun Jaitley failed to enthuse the salaried

class he seems to have made adequate provisions for
Indians to quit their jobs and turn entrepreneurs. He set a
target of providing credit of Rs 3 trillion (Rs 3 lakh crore)
to anyone who wants to start a medium, small and micro
enterprise (MSME) in the coming year. In addition, he
slashed the tax rate on smaller companies have a turnover
of less than Rs 2.5 billion (Rs 250 crore) to 25 per cent
from 29 per cent.
 Incentives for Digital Payments: This year, industrialists in the
digital payment space are optimistic about the continued push and the
extra incentives for digital payments.
 Reduction in Corporate Tax for Startups : Since 2014, the
Narendra Modi government had lent its support to the startup ecosystem
in the country. For this year as well, the startups are positive about the
deduction in corporate tax in 2018 Budget.
 Capital Allocation for Smart Cities Mission : With the Smart
Cities Mission on the cards for this year's Budget, industrialists are
expecting a major push to the manufacturing companies in India.
 Doubling Farmers' Income :President Ram NathKovind recently
spoke about reducing agrarian stress on the Indian economy and doubling
farmers' income. The 2018 Union Budget may see a heavy allocation on
rural and agrarian spending.
 Individual Tax Should be Lowered by At Least 5% : If the
individual tax rates are lowered by at least 5% in the Budget 2018, the
purchasing power of the common man and small entrepreneurs will see an
increase.
 Lower GST Rates on Electric Vehicles: The industry players in the auto
industry are hopeful of the reduction in GST and extension of tax benefits
to consumers on the purchase of electric vehicles in India. The government
may lower tax rates to 5% from the existing 12% GST.
 Reduction of GST on UCP (Under Construction Projects : The rollout
of GST and the aftershocks of demonetization has crippled the real estate
industry in the past two years. The builders in the industry are hopeful of a
further reduction of GST on Under Construction projects to accelerate
demand. The Government is also looking at reducing taxation to provide
affordable and low-cost housing units.
 Relaxations in interest rates on business loans to MSME
players : The financial inclusion for the MSMEs is high on agenda for
the flourishing growth of 48 million MSMEs in India. "The rate of
interest for business loans offered to MSME players is higher than other
types of loans such as housing, education and others. In order to bridge
the credit gap in the sector, relaxation in interest rates are urgently needed
to make MSMEs more competitive.
 Impact of 2018-19 Budget
 Rise in custom duty on mobile phones from 15% to 20%.
This will help domestic manufacturers.
 Package worth Rs 7100 crore for the textile sector.
 Lower tax rate of 25 per cent to companies with a reported
turnover up to Rs 250 crore.
 100% tax deduction to companies registered as farmer-
producer companies with turnover of Rs 100 crore.
 The government has opted for wider fiscal deficit at 3.5 per
cent of GDP for 2018-19 and projected 2018-19 deficit at
3.3 per cent of GDP. Higher fiscal deficit not good for
government credibility and FDI among other things.
 No tax cut for big corporates which could have helped
revive private investment as well as create more jobs.
 Budget 2019-20
 Union Finance Minister Piyush Goyal today also showered
tax benefit to Micro Small and Medium Enterprises
(MSMEs) owned by women entrepreneurs, indicating that
the Modi government is determined to extend constant
support to such initiatives. Lauding the government move,
Shilpi Agarwal, Partner, TASS Advisors said, "3% tax
benefit on women-owned MSMEs which indicates strong
movement towards women empowerment.“
• 2019-20 Revised Fiscal deficit at 3.4% as against the budget
estimate 3.3%.
• Mahatma Gandhi National Rural Employment Guarantee
program’s allocation increased by Rs 5000 crore to Rs
60,000 crore.
• Goyal boasted of the loan sanctioning scheme of up to INR 1
crore in 59 minutes for MSMEs, he also introduced 2 per
cent interest rebate on the incremental loan of around INR 1
crore for GST-registered SMEs, much to the sector’s delight
• Expanding rural industrialization using modern industrial
technologies, based on Make In India approach, using grass
root MSMEs and startups across the country
• Within 2 years, Tax assessment will be done electronically
 Future Impact of 2019-20 Budget
 FY19 fiscal deficit target and the ‘pause’ on FY20 fiscal
consolidation is a negative surprise and the credibility of the
target to get fiscal deficit down to 3 percent by FY21.
 The announced central government deficit targets of 3.4 % for the
fiscal year ending March 2019 and 3.4% for the fiscal year ending
March 2020, are in line with our expectations.
 No new policies to increase revenues were announced, while a
number of expenditure measures were announced that will
increase outlays and put pressure on the government’s ability to
meet its fiscal deficit target.
 Interim Budget provides fiscal stimulus of close one trillion
rupees through direct cash benefits to small & marginal farmers
and tax sops for the middle class. At the same time, the fiscal
deficit slippages are proposed to be limited to 3.4% of GDP.
Thank
You......