Budget 2019: What Arun Jailey's briefcase holds for MSMEs this time?

The MSMEs credit lending is marred in India wherein credit is not readily available and getting collateral-free loans is a hard nut to crack.

MSMEs has since long kept hopes on BJP-NDA led government. (Image: PTI)

Budget 2019: The six and the last budget by the incumbent Central government on 1st February 2019 is awaited with a baited breath by the micro, small and medium enterprises (MSMEs) as the sector has since long kept hopes on the Bharatiya Janata Party-led NDA to exempt MSMEs from tax on capital gains, arising out of the sale of a property. The MSMEs credit lending is marred in India wherein credit is not readily available and getting collateral-free loans is a hard nut to crack. The option left with these small or mid-sized entrepreneurs is self-funding by selling land or properties. However, that too is no cakewalk, as the tax on capital gains arising out of selling properties are levied, burning a hole in the already constricted funds. If a property is purchased against a property sold, the scenario is totally different. However, if a small industrialist sells his property with the motive to invest in his firm then he has to shell out taxes on profits of the sale proceeding. MSMEs have on one side long demanded to make capital gains on the sale of property tax-free, while on the other hand, credit and debt restructuring has been sought to ease loan stress for MSMEs. RBI has already issued new guidelines last week to ease MSME loans up to Rs. 25 Crores in default but standard category as on 1 st January 2019. This One-Time debt restructuring of troubled MSMEs is permitted without an asset classification downgrade. As per Reserve Bank of India guidelines, restructuring of troubled MSME loans has to be implemented by March 2020, next year. The Interim Budget 2019 to be presented by Finance Minister Arun Jaitley may have some good news for the MSMEs as the FM has time and again pointed the MSMEs as the backbone of the Indian economy.