Small companies come with big hopes. They account for the maximum growth of country’s economy and gives employment to a large section of the society. These companies are the pillar of development and to promote the growth of such companies our government has initiated various schemes and benefits keeping in mind the progress and development of such companies.
To avail all the benefits one needs to get their company registered under the MSME sector. Now, what is MSME? It is an acronym for micro, small and medium enterprise. These industries help in raising manufacturing sector production, extending support to other big companies in terms of providing raw materials, basic goods and other products as required. They also account for almost 40% of gross industrial value and 45% of total direct and indirect exports of India. These industries can be described under two categories:
- One is an investment in plant and machinery for those engaged in manufacturing or production, processing or preservation of goods and
- Another being, investment in equipment for enterprises engaged in providing or rendering of services.
To help them grow the government has come up with schemes like “ Startup India” “Digital India” “Make in India” all they are focused on promoting the industrial sector. The schemes provided under these sectors are:
The Corporate Tax for MSMEs has been reduced to 5 %. The timeframe for the alternative minimum tax is increased by 15 years also the tentative tax rate has been reduced by 2% for companies having a turnover of Rs.2 Crore.
MSME holders are offered loans with a lower rate of interest and can be availed from all public and private sector banks. They are also given special preferences if there is any delay in repaying. Recently the central government of India introduced an online website for granting loans in just an hour. This scheme is very beneficial as there is no hustle of visiting bank branches and also there are no collateral requirements.
It is mandatory for every company dealing with e-commerce to get their GST no. Registered. The government has provided 2% interest subvention to all the companies’ registered with GST on applying for fresh or incremental loans.
Rebate on applying for intellectual property
When registering your business, there’s a service provided by the government to brand a certain logo, name or symbol which is related to the name or any activity carried out by the company to safeguards your products and services by retaining its originality by not letting others copy it. These services are called intellectual property services. MSME holders are eligible for a refund of up to 80% from the Government on the patent application. There’s a sanction of Rs. 2 Lakh for filing an International Patent application. Also, the companies registered under the MSME sector gets a rebate of 50% on trademark filing.
The Government has exempted payment of the excise duty for MSME holders. Given their turnover should not exceed INR 1.5 Crore on their first financial year. However; the benefit of excise exemption is only for those goods which are sold or purchased under the brand name of its manufacturer.
These are the few of the schemes invented by the government to promote such an industry. If we look at the bigger picture, these industries are the futures of economic development of the country. These companies help in
- Generating employment
- Maintains economic stability
- Includes cheap labour
- Has a simple management structure
- Gets government subsidiary
As MSMEs are considered the growth engine for any developed or a developing country, they are being given every possible benefit to make them sustain devoid of any economic conditions. Also, the government has now made it compulsory for large corporations to buy certain allied products only from these local MSMEs.
The government also supplies trained professionals to help the owners of MSMEs to learn to run and operate the enterprise efficiently, to utilise the resources without leading to wastage, to maintain financial records systematically, and so on.