Finance minister P Chidambaram has announced a slew of measures to support micro, small and medium enterprises in the Union Budget 2013-2014 that was unveiled today. Here are the measures announced from the minister’s budget speech:
1. Micro, small and medium enterprises (MSME) have a large share of jobs, production and exports. Too many of them do not grow because of the fear of losing the benefits associated with staying small or medium. To encourage them to grow, I propose that the benefits or preferences enjoyed by them will stay with them for upto three years after they grow out of the category in which they obtained the benefit. To begin with, I propose that the non-tax benefits may be made available to a MSME unit for three years after it graduates to a higher category.
2. To provide greater support to MSMEs, I propose to enhance the refinancing capability of SIDBI from the current level of Rs 5,000 crore to Rs 10,000 crore per year.
3. SIDBI set up the India Microfinance Equity Fund in 2011-12 with budgetary support of Rs 100 crore to provide equity and quasi-equity to Micro Finance Institutions (MFI). An amount of Rs 104 crore has been committed to 37 MFIs. I have allocated Rs 100 crore to the IME Fund in the budget and I now propose to provide another sum of Rs 100 crore to the Fund.
4. The Factoring Act 2011 has been passed by Parliament. I propose to provide a corpus of Rs 500 crore to SIDBI to set up a Credit Guarantee Fund for factoring.
5. Tool Rooms and Technology Development Centres set up by the Ministry of Micro, Small and Medium Enterprises have done well in extending technology and design support to small businesses. I propose to provide, with World Bank assistance, a sum of Rs 2,200 crore during the 12th Plan period to set up 15 additional Centres.
6. Incubators play an important role in mentoring new businesses which start as a small or medium business. The new Companies Bill obliges companies to spend 2 percent of average net profits under Corporate Social Responsibility (CSR). I am glad to announce that the Ministry of Corporate Affairs will notify that funds provided to technology incubators located within academic institutions and approved by the Ministry of Science and Technology or Ministry of MSME will qualify as CSR expenditure.
Source: Finance minister’s 2013-2014 budget speech