Incentive for MSME from Current Budget

When the budget for the year 2013-14 was presented by our Union Finance Minister P Chidambaram, many firms/industries (includes large and small enterprise) were trying to relate the whole budget analysis with their respective business by anticipating some benefits out of it. In one hand as we see, heavy industries are getting many more incentives to boost the sector, on the other, Micro, Small, and Medium Enterprises (MSME), which have a large share of jobs, production and exports, seek to get more incentive to sustain and grow further from each budget. To encourage MSME to grow in future, the current budget has proposed the following incentives:

First, non-tax benefits may be made available to a MSME unit for three years after it graduates to a higher category. Such step would not be an obstacle for those who find it unattractive to grow large in the fear of losing the concessions allotted only to the sector they belong to. Considering this, the Budget proposal seems quite practical.

Second, to provide greater support to MSMEs, it proposed to enhance the refinancing capability of SIDBI from the current level of `5,000 crore to `10,000 crore per year.

Third, to avoid the bureaucratic procedures for loan approvals from bank, Federation of Indian Export Organisation (FIEO) has raised the demand to bring the export loan disbursal by banks under scanner of independent audits. FM agreed with the problems that suffered by SMEs and assured that we need a mechanism to deal with this challenge.

Fourth, FM proposes to provide a sum of Rs. 2,2000 core to tool Rooms and Technology Development Centres set up by MSMEs for setting up 15 additional Centres  during the 12^th plan period. This move will further help in extending technology and design support to small businesses.

Fifth, to encourage investment in innovation, companies will have to spend 2 per cent of average net profits under Corporate Social Responsibility. The Ministry of Corporate Affairs will notify that funds provided to technology incubators located within academic institutions and approved by the Ministry of Science and Technology or Ministry of MSME will qualify as CSR expenditure. Funds provided by corporates to academic incubators will come under CSR.

Sixth, to enhance availability of equity to MSME sector, FM proposes to set up   Rs.5,000 crore India Opportunities Venture Fund with SIDBI. 

Seventh, SMEs, including start-up companies, will be permitted to list on the SME exchange without being required to make an initial public offer (IPO), but the issue will be restricted to informed investors. This will be in addition to the existing SME platform in which listing can be done through an IPO and with wider investor participation. The decision to ease SME exchange listing norms by permitting start-up companies to list on the exchange without going through the elaborate process of making an initial IPO would help facilitate investments for innovative and young start-ups.          

Those above incentives will surely boost the existing enterprises to grow further and also welcome the new enterprises to start a business. With this support, recently RBI has slashed the repo rate (the rate at which it gives short term loans to banks) by a 25 basis point which means these commercial banks should charge lower interest rates on your new loan application. These steps are expected to boost investment that will encourage the new firm to start business. 

Compiled by:

Dr. Deepak Kumar Behera

Assistant Faculty

Entrepreneurship Development Institute (EDI) of India

(Source: Union Budget 2013-14)

Empresario 2013

Empresario – An event conceived by the students of Entrepreneurship Development Institute of India (EDI) has now become an annual entrepreneurship summit at EDI, Ahmedabad where EDI provides a platform to the startups across the country to showcase their products & services, pitch their ideas to a panel of esteemed and well known investor panel, plenary sessions and a lot more. Empresario was first organized in the year 2012 with a Startup fair where 20 companies had come forward to put up their stalls and display their products & services followed by a Charcha Session where the startups got an opportunity to get their problems & doubts answered by expertise of different sectors.

Empresario 2013 was organized on 1.3.2013, where it had a startup fair which had 30 companies displaying their new businesses & ideas; a Pitching event where 15 companies where given an opportunity to present their ideas to the investors to get funded out of which 3 startups were shown interest for by the investors and have been asked for further personal discussions. Chief Guest Mr. Pratul Shroff (eInfochips), Anand Lunia (India Quotient), and esteemed guests like Anil Joshi (Mumbai Angels), Shailesh Vikram Singh (Seedfund), Pooja Kumar (SME Joinup) honored the event, in the generous support of eChai – Point 10, GCCI Youth Wing, CII Young Indians, Sandesh, SME Joinup, with RadioCity as the Radio Partner. Guru Talks were delivered by Mr. Anil Joshi on ‘How to Pitch your Idea’ and by Mr. Shailesh Vikram Singh on ‘Leadership @ Startups’. A Charch session was held so that StartUps could seek advice on critical issues. Industry experts constituted Mr. Samir Parikh (NMIMS), Mr. Uttam Solanki (Lowe Lintas & Partners), Mr. Shrinjay Joshi (SJ Associates), Mr. Ranjeet Soni (IDBI).

The event, well organized by the PGDM –Business Entrepreneurship students Gaurav Gupta, Rounak Agrawal, Ritu Kedia, Srihari Patel & Sagar Punjabi under the esteemed guidance of the faculties Satya Acharya and Vivek Bhatt, they say that it’s not only a platform for the startups, but they also have got a lot to learn a lot and meet and know more people by being involved in organizing such events. These events give more learning than the classroom sessions as they have practical exposure to things. EDI plans this event on a bigger scale next year targeting a huge number of startups and more events to Empresario. EDI Empresario also had the privilege to host the eChai Demo day at EDI campus on 2.3.2013.

EMPRESARIO 2013

Entrepreneurship Development Institute of India (EDI), Ahmedabad, has been on the forefront for nurturing entrepreneurship amongst its students and the community. 

As the saying goes, "Human brain has no limits and there lies untapped potential in it", the world around us throws unexplored opportunities and we do spot them and contemplate also. But when it comes to execution, most of the people back out due to innumerable reasons. The reasons can range from delay in taking initiative to lack of resources.

Empresario was conceived with the clear objective to help thinkers cross over the bridge to the side of doers. The continuum which has evolved & will sprout through in future will grow around this seed objective and we will make sure that our foundations are strong enough to help startups cross over.

Empresario 2012 was organized in Feb 2012 as just the Start Up Fair and was a grand hit among the participating companies. It showcased companies like Cruxbot, Magic Box, iwillstudy.com, Shares Vault, Mad Mayor, Dass Well, Wellcrow, Silver Box, Amitech, Gridbots, Business IQ, Digital UpStarts, 4^th Wheel, Mobile App Tester, Pruthvi Group, Studio Astrea, RR Textile House, Taraswyaskar Business Services.

Empresario 2013 was organized on 01^st – 02^nd March, 2013 and held the following events:

·     Start Up Fair – The companies set up a demonstration stall and interacted with industry experts, academicians, students and various stakeholders of the entrepreneurship community.  This time we  encouraged rural artisans with a dedicated crafts pavilion for exhibition cum sale of the ethnic handicrafts.

·         Charcha Session - The companies were given a platform to brainstorm and discuss their problems with experts from varied fields. 

·         The Pitch - It aimed at giving a platform to entrepreneurs from across India to pitch for seed and growth funding to India’s leading investors. At the same time it provided investors with access to high quality, scalable business plans from various sectors. 

·         Guru Talks – ‘Been there, done that’ entrepreneurs cum investors like Mr. Anil Joshi (Mumbai Angels) and Mr. Shailesh (Seedfund) delivered talks on ‘How to pitch your Idea’ and   ‘ Why Start Ups fail?’

·         eChai Demo Day- eChai Demo Day is the quarterly showcase of innovative products & ventures in front of the larger eChai Community. It provided an opportunity for entrepreneurs, mentors, professionals, and students to connect, share and collaborate with each other.

The Start Ups  came from sectors like healthcare, education, IT, consumer services, energy etc. They were Trikon Technology Solutions, Arize Healthcare, Digital Upstarts, Pratikar Technologies, Tej SolPro, Youth Connect Magazine, Hmmbiz Web Solutions, iWillStudy.com -Ambastha EduTech Pvt Ltd, All Events in City, Parshwa, 360 Degree Technosoft, Desai Tech Consultancy, The Active STAR, Bookman, Meditail Stores, Mera Venue Pvt Ltd, Tec Mantra Labs, Empower Science, Living Wellness, AnaNaFiT, Mera Food Choice, Deluxe Elite Info Solutions, Tecnomind.

Prof. Minet Schindehutte of Syracuse Univ,NY At EDI

MY VIEWS ABOUT THE BUDGET FROM SME VIEWPOINT

                                            by Shri Rajiv Bakshi of Possible Group, Ahmedabad. 

Last week, the 82nd national budget was presented in the Lok Sabha, and to the surprise of none, the postmortem is still going on. I think overall this Budget, in its attempt to balance politics and compulsions of growth, turns out to make some economic sense. Unlike a typical election year Budget, there are no big, eye-catching freebies – this itself is a refreshingly bold step; but neither the Budget, despite its talks about fiscal consolidation and national deficit control, can be termed as purely an economic reformer's budget due to its lack of direction here and there. However, overall, I see some positive developments in this Budget.

And as far as the interest of the micro, small and medium enterprise (MSME) sector is concerned, the Budget 2013 certainly brings some hope.

First of all, I think the proposal to make non-tax benefits available to the MSME units for three years after they graduate to a higher category is in line with the findings of the Economic Survey, which points out to strong concentration of micro (94.9%) and small enterprises (4.9%) and near non-existence of medium enterprises (0.2%) within the MSME sector. Majority of MSMEs find it unattractive to grow large in the fear of losing the concessions allotted only to the sector they belong to. Considering this, the Budget proposal seems quite practical.

In addition, the decision to ease SME exchange listing norms by permitting start-up companies to list on the exchange without going through the elaborate process of making an initial IPO would help facilitate investments for innovative and young start-ups. Similarly, the proposal to allow tax exemption to angel investments is a step in the right direction as angel investing is critical to the MSME sector, but here, however, I think the Budget is not clear enough on the norms.

In another decision and which again seems a well-thought out one, the Finance Minister announced that funds provided by corporates to academic incubators will come under CSR. This move will encourage investment in innovation.

Among other proposals, allotting SIDBI a corpus of Rs.500 crore to set up a credit guarantee fund for factoring and raising the refinancing capacity of the bank to Rs.10,000 crore sound good, but here I think releasing funds alone is not enough. The Economic Survey mentions that the country's large banks have bureaucratic procedures for loan approvals and SMEs suffer due to this. This issue is not something new, and recently FIEO has also raised the demand to bring export loan disbursal by banks under scanner of independent audits. I agree with them – we urgently need a mechanism to deal with this challenge.

However, in terms of exports, I think the Budget 2013 puts a dampener on our expectations. Considering recent fall in overseas shipments and dull prospects ahead due to demand slump in global markets, I was expecting some strong support measures, but unfortunately there are not many apart from the benefits given to the textile sector. Exporters' hopes now hinge on the Finance Minister's promise that the FTP to be announced next month would address their concerns.

I invite your feedback on Budget 2013 and how you think it could affect your small business.
Please mail me at contact@possiblegroup.com

Thanks.
Rajiv.