NEW DELHI: The Finance Ministry is keen on key employment and export boosting steps to be accommodated in the Budget. It may consider fiscal incentives like interest rate subvention, lower tax rates for up to certain turnover threshold for key MSMEsectors who do the twin objective of exports and employment.
Sources said the PMO is also supportive of any higher budgetary allocations or any other fiscal support to these sectors because of their dual potential of pushing exports and creating more employment. Many sectors identified as having the dual potentials of exports and employment are textiles, leather, food processing, gems and jewellery, handicrafts, footwear and tourism.
The interim Budget had not announced any incentives for the MSME sector. The sector had received maximum damage on unemployment of consumption fall due to introduction of the Goods and Service Tax (GST) and demonetization.
Last November, Prime Minister Narendra Modi had announced sanctioning loans of up to Rs 1 crore in 59 minutes to GST-registered SME units with 2 per cent interest rebate on fresh or incremental loan of Rs 1 crore. There have been no other incentives for these sectors after this.
The incentives could also be considered on the lines of refunds on inputs. Budget could be seen offering a new incentive of refunding of all unrebated central and state taxes and levies on inputs used in ex