Dne Final Ppt

8/9/2019 Dne Final Ppt

1/19

Development of New

Business EnterpriseAnnouncements in Union

Budget 2010 for MSMEs

Prepared by:

Dhaval Shah (35)Maulesh Rathod (29)

Payal Patel (26)

Dharmesh Patel (17)

Submitted to:

Dr.Jaydeep Chaudhary(faculty,DNE,DBIM)


2/19


3/19

Micro, Small & Medium

Enterprises (MSMES)Definition:-

In Indian context, a small scale enterprise isbroadly defined in terms of the value of investment in

plant & machinery. A small scale enterprise is the one in

which the investment in fixed assets in plant andmachinery, whether held on ownership terms, on lease,

or in hire purchase, is shown below


4/19

Types Manufacturing Service

Micro

Enterprises

Rs. 1 Lakh to 25

Lakhs

Rs. 10 Lakhs

Small

Enterprises

Rs. 25 Lakhs to 5

Crores

Rs. 10 Lakhs to Rs. 2

Crores

Medium

Enterprises

Rs. 5 Crores to 10

Crores

Rs. 2 Crores to Rs. 5

Crores

Classification on basis on investments

limits


5/19

Production output in

small quantities

Informal management

style Small no. of workers& Employees

Usually present in the

form of family business

Lowest possible capital

investment in Plant &

Mach

Generally utilize local

resources & produces

goods & services

Have lower gestation

period & are easy to

set up in rural and

backward areas

The units is not owned, controlled or

subsidiary of any other industrial

undertakings

Characteristics of MSMEs


6/19

To improve the

standard of living for

the local population

To stimulate

growth of local

entrepreneurship

To address the

needs of local

markets

To promote a

decentralized pattern

of ownership

To foster

diversification of

economic activities

To increase employment

opportunities through labour

intensive process

To introduce newproducts particularly

to cater to the local

needs

Objectives ofObjectives of

MSMEsMSMEs


7/19

Role of MSMEs in Economic development

In India, MSMEs account for almost 45% of the total

industrial production.

MSMEs also contributes 40% of the Exports of thecountry

They manufacture over 6,000 products of the

country.

The MSMEs is the second largest employer in India

after agriculture.


8/19

Contd

The total jobs in the MSMEs in India goes up

to 650 lakh ( Acc to 11th 5 year Plan).

It provides opportunities for development of

technology.

They contributes 5 8% of the GDP of the

country.


9/19

Why Being Small is Efficient?

Economies of scale for certain trades.

Lower transaction cost in small entity.

More flexibility.

Innovation often possible in small flexible

units.


10/19

The SMEs in India: Present Scenario

Between 2001-06, companies with net turnover ofRs. 1 crore 50 crore had a higher growth rate of70.1 % as compared to 16.9 % for largecompanies with turnover of over Rs. 1,000 crore

(Business World Jan. 2007).

Today some SMEs are investing in R&D in orderto compete globally.

With the elimination of Multi Fibre Agreement(MFA) in 2005, lot of opportunities have openedfor the Indian textile sector.


11/19

The number of SSI units in 2007were estimated

at 44 lakhs.

Today it has come down to around 40 lakhsbynow.


12/19

Position of MSME in India:

MSMEs (Micro, Small and Medium

Enterprises) employs about 6 Crore (60

million)people in India and this sector

contributes about 40 per cent to India's overallexports.

T

here are 26

million MSMEs in the country,contributing about 45 per cent to India's total

manufactured output.


13/19

Rs 2,400 cr

Budgetallocation

for MSME

to boost

economy


14/19

((1) Increased Budget allocation1) Increased Budget allocation

"I propose to raise the allocation for this sectorfrom Rs 1,794 crore

to Rs 2,400 crorefor the year 2010-11, Finance Minister Pranab

Mukherjee said while presenting

Budget 2010-11.


15/19

(2) Limit of turnover enhanced(2) Limit of turnover enhanced

SMEs will also benefit from the increase in thethreshold limits for compulsorytax auditwhich are

to be enhanced

to Rs. 60 lakh (from the present Rs. 40 lakh) for

businesses and

to Rs. 15 lakh (from the present Rs. 10 lakh) for

profession.

Limit of turnover for the purpose ofpresumptive

taxation of small business has been enhanced to Rs.

60 lakh.


16/19

((3)3) ExtensionExtension of interest subventionof interest subvention

extending the interest subvention of2% for onemore year also came as good news for SMEs, theresno doubt about that.

(4)Retaining Service(4)Retaining Service taxtax

This year's Budget has marked the long-term

challenges of the SMEs by retaining the service tax at10 % and also by providing relief on central exciseduties for MSMEs.


17/19

((5)facilitating5)facilitating conversionconversion

The Budget 2010 proposes to introduce

several provisions to grant tax benefits to

small private limited companies desired to

convert into Limited Liability Partnership(LLP), transfer of assets as a result of such

conversion will not be subject to capitalwill not be subject to capital

gainsgains, which is a welcome initiative.


18/19

Some other initiatives which have been taken overall but will affect the

SME sector positively are:

Other initiativesOther initiatives

A one-time grant ofRs.200 crore to TirupurTextile Sector.

Government initiative to give more banking licenses and extend

banking service for the under-banked and un-banked segments ofthe society so as to provide finances to MSMEs

Agreement signed with ADB forUS$ 150 mn to implement Khadi

Udyog Reform.

Doubling of corpus of micro-finance development and equity fund

from Rs.200 crore to Rs. 400 crore.

Allocation ofRs.1000 crore to the National Social Security Fund

for the employees of the unorganized sector.


19/19

Thank-you

Documents

Dne Final Ppt