{"id":32672,"date":"2021-07-08T11:21:25","date_gmt":"2021-07-08T05:51:25","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=32672"},"modified":"2021-07-08T11:21:27","modified_gmt":"2021-07-08T05:51:27","slug":"union-budget-2021-22-underlining-key-announcements-for-starts-up-and-msme","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/union-budget-2021-22-underlining-key-announcements-for-starts-up-and-msme\/","title":{"rendered":"Union Budget 2021-22: Underlining Key Announcements for Starts-up and MSME"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Union Budget 2021-22 was introduced in the higher house of parliament in the month of Feb. It was the first time when the budget was unveiled on the digital platform. While promulgating the new budget, the honorable Finance Minister Nirmala Sitharaman promised to take plenty of measures to propel the growth of startup and <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME<\/strong><\/a>. The budget also aimed to boost the digitization that has witnessed tremendous growth in the Covid era. Let us go through the announcements that were intended to benefits the MSMEs and Start-ups<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Announcements Unveiled By Finance Minister under Union\nBudget 2021-22<\/h2>\n\n\n\n<p>Here are\nthe key announcements made under the Union Budget 2021-22 by the honorable\nFinance minister: &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"998\" height=\"560\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/Underlining-Key-Announcements-for-Starts-up-and-MSME.png\" alt=\"Key Announcements Unveiled By Finance Minister under Union Budget 2021-22\" class=\"wp-image-32679\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/Underlining-Key-Announcements-for-Starts-up-and-MSME.png 998w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/Underlining-Key-Announcements-for-Starts-up-and-MSME-300x168.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/Underlining-Key-Announcements-for-Starts-up-and-MSME-768x431.png 768w\" sizes=\"(max-width: 998px) 100vw, 998px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Incentivising&nbsp;One\nPerson Company Setup<\/h3>\n\n\n\n<p>To benefit start-ups in establishing One Person Companies, Finance Minister stated the OPCs to propel without any limitation on annual turnover and paid-up capital. The Minister also permitted their conversion into any other company structure at any time and minimizes the residency limit for an Indian national to establish an OPC from 182 days to 120 days and also enables NRIs to register <a href=\"https:\/\/corpbiz.io\/one-person-company\"><strong>OPCs<\/strong><\/a> in India. The decision is likely to benefits a massive number of small businesses by allowing them to adopt a business structure that is more stable and resilient. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Increased relaxation in terms of tax holiday<\/h3>\n\n\n\n<p>To stimulate the growth of start-ups investment in the nation, the budget proposed eligibility\u2019s extension for claiming tax holidays new businesses along with capital gains exemption for investment in start-ups till 31<sup>st<\/sup> March 2021, to encourage funding. Since the majority of small businesses are still in the post-COVID recovery phase, this decision has come as a relief as it allows catering upfront liabilities other than taxes for an extended time frame. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/what-is-msme-registration-and-how-to-get-it\/\">What is MSME Registration and how to get it? <\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Boost digital payment <\/h3>\n\n\n\n<p>Finance\nMinister unveiled the corpus of Rs 1500 crores for the projected scheme that\naims to render financial support to ensure widespread utilization of digital payment\nmodes. This decision envisages the incentivization of digital payment modes so\nthat financial transactions would become more swift and secure. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Insolvency Resolution<\/h3>\n\n\n\n<p><strong>To ensure prompt settlement of cases, the <\/strong>Finance Minister made the following decisions<\/p>\n\n\n\n<ul><li>Strengthening of National Company Law Tribunal (NCLT) framework<\/li><li>Implementation of e-courts system<\/li><li>Inculcation of alternate methods of debt framework<\/li><li>Implementation of a new framework for MSMEs <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Budgetary Allocation <\/h3>\n\n\n\n<p>An\nassured sum of Rs 15,700 was announced for the development of the MSME sector. The\ndeclared amount was almost double of sum released in the preceding year. The\ndecision has come as a massive relief for small businesses and MSMEs whose\nexistence was at the stake in the Covid era. The said amount will ensure their\nprompt revival and let them make the stronger move to come back on track. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Reduction in the Customs Duty <\/h3>\n\n\n\n<p>The <strong>government of India<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Government_of_India\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> said that it is minimizing custom duty to 7.5% on semis, flat, &amp; long products of alloy, non-alloy &amp; stainless steel to support MSMEs and other industries that have been badly hit by the sharp spike in iron and steel prices. The Finance minister also promised to exempt duty on steel scrap for the period up to March 31<sup>st<\/sup>, 2022 to facilitate relaxation to metal recyclers. <\/p>\n\n\n\n<p>The\nminister also proposed a spike in duty from 10 to 15% on the plastic builder\nand steel screws to benefit MSMEs. By increasing the import duty, the\ngovernment intends to help the local manufacturers as it would allow them to\nboost the production volume. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">No Exemption on Imports<\/h3>\n\n\n\n<p>The\nUnion Budget 2021-22 has got rid of prevailing exemption on import of certain\nclass of leather.&nbsp; This decision would\nallow the local manufacturers (which are mostly MSMEs) to scale up the\noperation and avail the much-needed production order. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Revising Definition<\/h3>\n\n\n\n<p>FM\nSitharaman proposed the revision in the small companies\u2019 definition in the\nbudget by escalating limits for paid-up capital from Rs 50 lakhs to Rs 2 crores\nand revenue from Rs 2 crore to Rs 20 crore. The announcement aims to benefits\nmore than two lakhs entities in simplifying their legal obligation <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Key highlights of Union Budget 2021-22<\/h3>\n\n\n\n<p><strong>Expenditure:<\/strong>&nbsp;&nbsp;The government projects to spend Rs 34,83,236 crore in\nFY 2021-22. In light of the revised estimates, the GOI spent Rs 34,50,305 crore\nin FY 2021-22, which is 13% higher than the budget estimate. &nbsp;<\/p>\n\n\n\n<p><strong>Receipts:<\/strong> The receipts (excluding borrowing) are anticipated to be Rs\n19,76,424 crore in 2021-22, which is 23% higher as compared to the revised\nestimates of 2020-21. In 2020-21, revised estimates for the same were 29% lower\ncompared to the budget estimates. <\/p>\n\n\n\n<p><strong>GDP\ngrowth:<\/strong> &nbsp;Nominal GDP is\nanticipated to experience a growth rate of 14.4% in 2021-22. <\/p>\n\n\n\n<p><strong>Deficits:<\/strong> Revenue deficit is expected to stay at 5.1% of GDP in 2021-22,\nwhich is lower than the previous year&#8217;s rate. The fiscal deficit, on the other\nhand, is likely to stay at 6.8% of GDP in 2021-22, which is lower than the\nrevised estimate of 9.5% in 2020-21. The government is assured that the fiscal\ndeficit rate will encounter a gradual drop in the coming years. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion&nbsp; <\/h2>\n\n\n\n<p>When announced, the Union Budget 2021-22 seems to be on par from the growth standpoint of MSMEs and start-ups. A lot of attention has been given to the small businesses under this budget with the introduction of growth-based measures such as Rs 1500 Crore corpus, encouraging OPC setup, reduction in the customs duty, so on and so forth.  The decision for leveraging the MSME sector via a corpus size of Rs 1500 crores seems to be influenced by the loopholes created by the Covid-19 pandemic. Furthermore, the decision for withdrawing exemption on leather import was certainly remarkable as it gives an edge to the local manufacturer to escalate the production volume. Also, the revelation regarding the incorporation of e-courts and Strengthening of the National Company Law Tribunal has ensured the prompt resolution of cases.\u00a0  <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/register-under-micro-small-and-medium-enterprises-in-india\/\">How to Register under Micro Small and Medium Enterprises in India? <\/a><\/mark><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Union Budget 2021-22 was introduced in the higher house of parliament in the month of Feb. It was the first time when the budget was unveiled on the digital platform. While promulgating the new budget, the honorable Finance Minister Nirmala Sitharaman promised to take plenty of measures to propel the growth of startup and MSME. [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":32682,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1422],"acf":{"service_id":"71"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":2866,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32672"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=32672"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32672\/revisions"}],"predecessor-version":[{"id":32688,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32672\/revisions\/32688"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/32682"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=32672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=32672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=32672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}