The present government of India has taken a few big steps for MSMEs that will help in boosting exports.
Recently government took a step of cutting corporate tax rate to 25 per cent with annual turnover up to Rs 250 crore, providing an additional Rs 3,794 crore for MSMEs for credit and comprehensive package with allocation of Rs 7,148 crore compared for MSMEs in textile sector.
These would certainly help MSMEs. However, a few sector specific steps for promotion of exports would have been helpful as higher exports in a growing world economy could be one of the drivers to reach 7.5 per cent growth.
It is also a bit disappointing to observe that the Budget is silent on trade facilitation which would be instrumental to reduce trade and transactions cost and make India’s export more competitive.
The only specific mention with regard to trade policy is the increase in customs duties of a few items to promote Make in India and its domestic manufacturing.
There is no doubt it’s a good Budget given the fiscal space available to Finance Minister Arun Jaitley. However, if India has to achieve more than 7 per cent growth rate, it is time to reap benefits from the growing world markets through exports where Budget is quite silent.