Expect financial outlay for MSME, travel industry, skill development and more import duties in Budget 2021
A slew of measures directed towards expediting the recovery of micro, small and medium enterprises (MSME) can be expected in the roll out of Union Budget 2021 as businesses seek the extra working capital support after total allocation of Rs 3.7 lakh crore by the government under Atmanirbhar package last year.
The timeline of Emergency Credit Line Guarantee Scheme which (ECLGS) was extended earlier till November 2020 has further been stretched till March 31, 2021, In order to expand the scope of scheme to cover individual loans for business purposes and encourage borrowers, it’s criteria for eligibility, turnover limit, moratorium, and repayment window has also been tweaked.
Hopeful of a revitalising Budget 2021, The Federation of Associations in Indian Tourism and Hospitality (FAITH) has recommended export earnings be made tax free and also incidence of taxes in tourism earnings be zero rated. Besides this service Exports from India Scheme (SEIS) of 10 per cent to all foreign exchange earning members in tourism be made applicable for 5 years to ensure a post-Covid recovery.
With a vision to boost domestic manufacturing, the government is also looking to increase the import duties on more than 50 items, as per the information divulged by govt resources to Reuters. Duty hikes could impact furniture and electric vehicles, potentially hurting the likes of Swedish furniture maker Ikea and Tesla, which is planning to launch its cars in India this year, sources informed.
The government has taken an array of initiatives in recent times to promote local manufacturing, raising import taxes on a wide range of products such as footwear, furniture, toys, electrical and electronics items by up to 20% is one of them.
