Shobhit Singh, Director, Stone Sapphire India Private Limited
It is refreshing to see the government keeping the budget focused on growth , not succumbing to the political vantage point owing to the upcoming election in multiple states. We welcome the exclusion of popular blanket subsidies this time, saving much of the amount for the Government to spend on critical challenges or infrastructure and rural development.
Here’s the limitation. Extension of the ECLGs, is a positive step, however, needs to be more nuanced to really revive small and medium enterprises. All businesses have different credit limits , but the pandemic hit everyone equally . These interest rates and disbursement amounts are calculated based on the ongoing credit limit of the businesses PRE COVID times, instead of the Impact of COVID faced during and after pandemic. Smaller enterprises with better cash flows and lesser debt earlier, today have a disadvantage, making their recovery tougher than other companies who had more debt. The banks are resistant to take risk and disburse loans, despite having the budget limits. The Government could have offered to absorb this risk on behalf of banks, so that more funds can be loaned based on different needs of the small business. Any tax relief, deductions against the inexcusable medical / insurance expenses owing to pandemic would have helped lessen the Impact on working capital.
It is encouraging to see continued focus on the Make in India initiative . Simplifying customs rate and tariff structure for items which are or can be manufactured in India, providing concessional duties on raw material that go into manufacturing of intermediate products is perfectly aligned to make an ‘Atmanirbhar Bharat’.