Budget 2013: 4 Factors Which Will Affect Small Businesses

Bangalore: A country’s economy do not only depends on the larger enterprises alone. The small scale enterprises including the medium and the micro enterprises (MSME) also play an important role in the nation’s development.

India has a larger number of these kinds of enterprises. However, all these enterprises are not lucky enough to taste success. Most of these enterprises have to undergo a heavy amount of loss due to various reasons and finally they get shut down.

Here is the list of four factors that the Indian government will adopt in the future to encourage the growth and progress of the MSMEs as reported by ‘yahoo’.

1. Encouraging the growth of the MSMEs

Most of the micro, small and the medium enterprises fail to grow due to the fear of bearing losses in the market. Their main obstacle is the ‘investment’. They are not strong enough to invest a huge amount of money for a longer period of time, expecting profit.

To overcome this, the government has proposed the non-tax benefits for the MSMEs in this year’s budget. Once an MSME qualifies to the next higher category, it can take advantage of this non-tax benefit for three years.  

2. Extended alimony to the MSMEs

The capability of Small Industries Development Bank of India (SIDBI) has been raised to 10,000 crore from 5,000 crore. From this amount, 100 crore will be vested on the India Microfinance Equity Fund.

This year’s budget will allot 500 crore to the Small Industries Development Bank of India as Credit Guarantee Fund for distributing.

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