MSMEs Are Major Engine of Growth and Employment in India: Union Budget 2018

Finance minister Arun Jaitley presented Union budget 2018 in Parliament today. This is the Narendra Modi government’s last full budget before the 2019 Lok Sabha elections.  According to Jaitley, MSMEs are major engine of growth and employment in the country. He allocated INR 3,794 crore to MSME Sector for giving credit support, capital and interest subsidy and innovations.

“Massive formalization of the businesses of MSMEs is taking place in the country after demonetization and introduction of GST. This is generating enormous financial information database of MSMEs’ businesses and finances. This big database will be used for improving financing of MSMEs’ capital requirement, including working capital,” he further added.

Jaitley in his budget emphasized on technology and said that it will be the biggest driver in improving the quality of education.  Technology will also be used to upgrade the skills of teachers through the recently launched digital portal ‘‘DIKSHA’’.

 According to Kiran Deshpande, Co-founder & President - Mojo Networks, “The government’s budget for 2018-19 has a special emphasis on increasing digital intensity in education. Wireless communication technology has a big role to play in enhancing interactivity in at all levels and in creating smart campuses. Additionally, providing WiFi in trains, increasing broadband access through WiFi hotspots to 5 crore rural citizens and connecting 1.5 lakh more villages under BharatNet initiative is a step forward towards digitizing India.” He further added, “Also reduction in corporate tax to 25% is a huge boost and will benefit the entire micro and small and medium enterprises which amount for 99% of the companies filing their tax returns.”

“We welcome the government’s thrust on encouraging R&D pursuits in the areas of AI, machine learning, robotics and edge analytics. This move will further leapfrog the innovations in this space that is significantly driven by Indian companies and will place the country at the centre of global digital transformation focus,” said Dr. Keshab Panda, L&T Technology Services, CEO & MD.

Anil Valluri, President, NetApp India & SAARC, said that the last few years have seen large initiatives designed to bring about substantive change. The FY18 budget marks time, with its particular focus on agriculture, healthcare and infrastructure and the continued thrust on the MSME segment. The focus on wide scale broadband access, on Machine learning, AI and robotics, on R&D as well as skilling, and on Smart Cities will keep pushing India’s Digital agenda, well supported by the additional fund allocation. It is a quietly progressive budget, and timed well to focus on readying all cross-sections of Indian society to reap the benefits of the future.”

Vishal Agrawal, Managing Director, India & SAARC, Avaya  said, “The focus on healthcare, agriculture, education and improving connectivity in the rural sectors shows the government’s focus on building a strong economy and simultaneously readying the country for a progressive future. The budget also laid due importance on the importance of skilling and employment. Recognizing the MSME sector as both a key employer and an important growth driver for the economy, the setting up of online loan sanctioning is a welcome move.

From a technology perspective, a clear roadmap to build on new technologies like Artificial Intelligence, blockchain, Internet of Things, digital manufacturing and quantum computing is a positive sign. The proposed national program to direct efforts in research, training and skilling around Artificial Intelligence by NITI Ayog is a clear sign of fuelling an innovation mind-set in the country. Blockchain is another significant area highlighted in the budget and the government is keen on using these technologies to propel a transparent and corrupt free economy. The government’s focus on further building Digital India by allocating Rs. 3073 crore showcases the emphasis on building a global digital economy.”

According to  Padmanabha Krishnamurthy, CFO at Paladion Networks," the 2018 budget has a strong focus on Agriculture, Healthcare, and Rural Development. I believe this will contribute to the holistic growth of India. The reduced corporate tax rates to the MSME sector is welcome, but I hope it is in the books to extend this benefit to all companies soon. I am happy to see doubling in the allocation of funds on Digital India initiatives with more emphasis on emerging technologies like Artificial Intelligence, Robotics, Big Data, IoT, etc., and a special focus on Cyber Security with the launch of Centre of Excellence. Finance Minister has tried to keep the fiscal deficit within the target limits. Overall it is a prudent and growth-oriented budget. "

“We are glad to see the government’s increased focus on Digital India. With the budgets for the initiative doubled this year, it is set to be one of the key drivers of India’s economic growth. The Union Budget for 2018-19 has laid a strong emphasis on emerging technologies, such as Robotics, Artificial Intelligence, Machine Learning, Big Data and IoT, which we believe, is an important step towards fostering innovation in the country. This would also help in creating jobs, improving the quality of education and healthcare.

The announcement of a national program directed towards research and development of AI and Machine Learning, as well as efforts towards exploring Blockchain technology, are the testimony to the fact that India is taking significant steps to gain a rightful place on the global technology map.

Along with the push on technology, the new provisions for financial support, in the form of credit, financing and tax relief for MSMEs, will further boost the growth of smaller businesses in the country and help spur the Indian economy at large. With the stage set, we look forward to a great year of growth for the robotics and automation sector,” said  Samay Kohli, Group CEO, GreyOrange.

Srinivasan H.R., Managing Director and Vice-chairman of TAKE Solutions said,“the Union Budget 2018 has taken a huge step in making healthcare affordable and accessible by launching the world's largest government-funded healthcare programme. The initiative to cover 100 million families with INR 5 lakh per family annual insurance cover is a welcome change. More exposure of the healthcare industry value adds to the Life Sciences sector which will boost the growth of the sector. The government’s proposed R&D investments in futuristic technologies - artificial intelligence, robotics, big data are sure to be a game changer to our industry.”

“MSMEs have been a pillar of major emerging economies like India. MSMEs being a focus for Universal Robots, the government investment and tax reliefs will encourage the growth of this sector and lead to further employment generation. The allocation of the investments announced in the budget 2018-19 will help research and development in areas of Machine Learning, Artificial Intelligence and Robotics & Automation. Some of the interesting outcomes of this budget have been the duty enhancement on certain automobile components, doubling of resource allocation for food processing and to the digital India program. The food processing industry is growing at 8% and is an exciting development as cobots play heavily in end of Line packaging automation, an essential area to be competitive for global and local food processing companies. The Digital India program, a key to Industry 4.0 wherein cobots play an integral part as one of the key levers to supplement labour in terms of productivity, quality and ergonomics allowing India Manufacturing to climb up the value chain. Lastly, the government’s outlook on the automation in major manufacturing industries with the advent and adoption of newer technologies which will lead to increase in the efficiency of the business processes, operations and productivity,” said Pradeep David, General Manager, Universal Robots – South Asia.

 Sunil Misra, Director General, IEEMA said, “We find the budget positive considering the fact that it is affecting a major part of the population positively. The allocation for Saubhagya scheme, allocation to infrastructure, railway, smart city and defence will boost power sector also. Rural electrification and social sector spend will in long-term help consumer electrical  industry. The sops to MSME through corporate tax reduction and Mudra loans is a welcome move for the industry. Special allocation to smart city will boost domestic electrical industry also increase in custom duty for certain item will also boost the industry.”

Shrinivas Chebbi, President- Buildings Business, Greater India Zone, Schneider Electric said, “this is clearly a forward-looking budget and the focus on making urban living smart with the allotment of INR 2.04 lakh crore for smart cities, is laudable. This boost will ensure that this flagship programme of the government that aims to turn our urban centres into ultra-modern, safe and connected habitats will move forward full force.

What is encouraging is an acknowledgment in the budget that digitization and cutting-edge technology is a powerful tool for driving economic growth. With Schneider Electric’s focus on creating sustainable, safe and futuristic living and working spaces we see great synergy here.”