Budget 2013: 4 Factors Which Will Affect Small Businesses

A country’s economy do not only depends on the larger enterprises alone. The small scale enterprises including the medium and the micro enterprises (MSME) also play an important role in the nation’s development.

India has a larger number of these kinds of enterprises. However, all these enterprises are not lucky enough to taste success. Most of these enterprises have to undergo a heavy amount of loss due to various reasons and finally they get shut down.

Here is the list of four factors that the Indian government will adopt in the future to encourage the growth and progress of the MSMEs as reported by ‘yahoo’.

1. Encouraging the growth of the MSMEs

Most of the micro, small and the medium enterprises fail to grow due to the fear of bearing losses in the market. Their main obstacle is the ‘investment’. They are not strong enough to invest a huge amount of money for a longer period of time, expecting profit.

To overcome this, the government has proposed the non-tax benefits for the MSMEs in this year’s budget. Once an MSME qualifies to the next higher category, it can take advantage of this non-tax benefit for three years.  

2. Extended alimony to the MSMEs

The capability of Small Industries Development Bank of India (SIDBI) has been raised to 10,000 crore from 5,000 crore. From this amount, 100 crore will be vested on the India Microfinance Equity Fund.

This year’s budget will allot 500 crore to the Small Industries Development Bank of India as Credit Guarantee Fund for distributing.

3. Including the MSMEs on the SME Exchange

All the MSMEs will be included in the Small and Medium Enterprise (SME) Exchange. The MSMEs would not have to make any offers in the public. Like the large scale enterprises, they will also get an extended number of investors. However, the inclusion of the MSMEs in the SME exchange will be kept limited to certain categories of investors.

4. New Investment

From the new investment grant for new high value investments, the Finance Ministry has estimated “enormous spill-over benefits to small and medium enterprises”. The Budget recommends that any company investing Rs 100 crore or more in plant and machinery from April 1, 2013 to March 31, 2015 will be allowed to subtract an investment allowance of 15 percent of the investment. This will be subjected to the existing rates of depreciation.

 

#Delhi’s Chandni Chowk Market Online Now-Thanks to #Google and #Hostgator

Delhi’s famous market Chandni Chowk gets  websites for individual businesses.

New Delhi: About 2500 businesses in India’s well known market, Chandni Chowk, Delhi have their own websites now. It is one of the oldest markets in India built by Mughal rulers centuries ago. The websites were built by Hostgator,the leading Indian web hosting company in association with Google as part of a program called “India Get Your Business Online” launched in November 2011.The program offers free websites and domains to small business owners in India.

Most of the small businesses in India do not have a website and hence Google’s new initiative is to bring them online to increase their business. Google India Vice President Rajan Anandan said that in India there were 137 million internet users and great majority of them look online for various information. Only few small businesses have a decent looking website, he added.

Under the present scheme, Google provides a domain name, a website and free hosting for one year. The free hosting is given by Hostgator, its hosting partner. The websites will be integrated with Google Maps by which the businesses will be listed under various categories. After one year, an amount of 700 Indian rupees as hosting fees will be charged by Google to continue the service.

A common directory of businesses in Chandni Chouk, http://www.chandnichowknowonline.in has also been launched in addition to individual websites. The directory offers a main search bar for browsing shops and businesses in the home page. It also gives business owner’s name, address, contact number and link to the business website.

According to Pradeep Jain, Kinari Bazaar Gota Zari Association of Chandni Chowk, the initiative by Google would make it easier for customers to find them online. He added that the place was a hub of product suppliers, exporters, wholesalers and many other medium sized shops in north India. Most of them have been operating there for over hundred years. The communication and IT minister of India, Kapil Sibal also said that the move would help those business owners increase their business.

What’s India’s Biggest Growth Hurdle?

Excessive bureaucratic hurdles, inflation and political instability have emerged as the top concerns for the Indian businesses, while larger companies are more worried than their smaller peers about global issues, a survey has found.

According to the survey conducted by workplace solutions provider Regus, almost half of the decisions makers at Indian businesses (47 per cent) fear that the red tape is a serious threat to growth in the country.

 

However, the discontent over red-tapism is slightly less prevalent among larger companies, as greater resources are available with them to deal with paper work and regulation.

The survey, conducted among 387 businesses, noted that 48 per cent of small companies and 52 per cent of medium-sized firms identify red tape as harmful.

“This research shows that red tape and inflation are a real worry for India’s vibrant businesses, and they want India’s policymakers and bureaucrats to improve their performance,” Regus Regional Vice-President (South Asia) Madhusudan Thakur said.

Other major causes of disquiet among business community are inflation, political instability and the state of the global economy. Further threats to growth mentioned by business leaders include terrorism, corruption, and the lack of easily-available finance for small businesses.

Besides, larger companies, with their more globalised activities, are more worried about the global economy than their smaller counterparts.

“Businesses can counter such problems themselves, by looking for ways to manage their cost base, and for ways to spend more time on core business,” Thakur said.

“Whilst they may not be able to move the red tape mountain, they can minimise or outsource other non-aspects that consume management time, leaving them with more time to pursue growth,” he added.

“The evidence of the obstacles faced by businesses comes as growth is forecasted to slow to 6 per cent in 2012, with blame being put at the door of policymakers,” he said.
Source: PTI

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