Expectation from Union Budget 2010 for SME Sector

Most of the handicrafts, including wooden handicrafts, wrought iron crafts and other enterprises involved in textile and garment etc. fall within the Small and medium Enterprises (SME) sector. Discouraged by the economic downturn of last year and with no new jobs available in the market, the small entrepreneurs expect a lot from the the Finance Minister. Their expectations from Union Budget 2010-11 is high regarding inclusion of such provisions that could encourage people in SME sector.

• SMEs expects the Budget 2010 to focus more on Infrastructure growth.
• Industry is also hopeful of seeking tax incentives so as to spur demand. It wish list for budget also includes some measures that could shield it from global swings in commodity prices.
• NREGA would have to be more effective so that Indian economy can further move a little away from the concept that agriculture is the end of rural markets.
• For making Indian infrastructure investment attractive, high cost of debt to infrastructure should be addressed in some form.
• Along with focus on power and on roads, adequate focus should also be placed on transmission of power and water management. Some kind of short term subsidies should also be introduced.
• The concept of Special Economic Zones (SEZ) should also be strengthened for handicrafts and other SMEs.
• Associations related even to SME and handicrafts are till now subjected to income tax which is a negative factor for their development. This tax on associations should be withdrawn.
• Union Budget 2010 should remove indirect tax anomalies and give access to an incentive for capital expenditure via additional depreciation for making the Industry globally competitive.
• Job creation should be supported fiscally along with all skills development programmes (like in wooden handicrafts, furniture manufacturing etc.) that can guarantee employment.
• Tax structure should be simplified and surcharges and cesses should be abolished.

Small and medium enterprises (SMEs) sector is crucial to employment generation, decentralized development and low cost products and services. The Budget must give proper incentives to the SME sector for its optimum growth.