In order to increase exports from the MSME sector Experts have recommended stronger measures to be included in the union budget for 2023–24 around the interest equalisation programme for pre and post-shipment rupee loans for MSME exporters, which accounts for roughly 50% of the nation's exports. The Reserve Bank of India (RBI) last year extended the programme until March 2024 in order to increase outbound exports. The programme gives exporters access to bank financing at a lower interest rate. In this blog, we will discuss how the 2023 budget can boost exports from India.
Key Highlights of Budget 2023-24
The fifth budget under Modi 2.0 was unveiled Wednesday by Union Finance Minister Nirmala Sitharaman. The Indian economy is on the right track and is poised for a bright future, according to Nirmala Sitharaman, who made this statement in the final comprehensive budget before the general elections next year. Sitharaman highlighted significant modifications to the tax slabs under the new tax regime as well as a significant increase in funding for railways and capital expenditures, which will greatly benefit taxpayers and the economy.
There are sector-wise detailed readings of the various measures Finance Minister Sitharaman announced in Budget 2023:
- No changes in the old tax regime
- New tax regime to create the default tax regime. However, individuals can take the old tax regime.
- No tax on income up to Rs 7.5 lakh a year in the new tax regime (with the inclusion of standard deduction)
- Govt proposes to limit the highest surcharge rate from 37%
Some of the significant Aims of Budget 2023 include:
- Facilitating ample opportunities for citizens, particularly youth
- Furnishing strong impetus to growth and job creation
- Strengthening macro-economic stability
- The objective for the empowerment of women in Budget 2023
- To provide women self-help groups to reach the next stage of economic empowerment
- To assist self-help groups with raw material supply, branding, and marketing of products
In terms of Export and Imports, The Reserve Bank of India (RBI) last year extended the programme until March 2024 in order to increase outbound exports for the MSME Sector. The programme gives exporters access to bank financing at a lower interest rate. Here you can get detailed information about the recent notification from the budget 2023-24. Also, know about India trade data.
Increase Trade, import and export for the MSMEs Sector
Experts have suggested stronger measures be included in the union budget for 2023–24 around the interest equalisation programme for pre and post-shipment rupee loans for MSME exporters, which accounts for about 50% of the country's exports, in order to increase exports from the MSME sector, which makes up the majority of the nation's exports. In order to boost exports abroad, the Reserve Bank of India (RBI) last year extended the scheme through March 2024. Through the scheme, exporters can obtain bank funding at a reduced interest rate.
According to Arun Singh, Global Chief Economist at data and analytics company Dun and Bradstreet Dun, since interest rates are rising quickly, support in the form of interest subsidies can be increased in this year's budget from 2% to 3% for merchant exporters and from 3% to 5% for MSME manufacturers by India trade data. Furthermore, given that input costs and inflation have hit decadal highs, exporters may be allowed automatic increases in loan limits on a case-by-case basis without the requirement for collateral.
Given that it is anticipated that external demand would be sluggish going forward, officials also recommended that the government re-evaluate the advantage provided to exporters during the epidemic year of 2020. In a budget suggestion statement, he stated, the period of pre-shipment and post-shipment export credit sanctioned by banks can be 15 months as was offered during the epidemic from the existing one year." The scheme received a formal allocation of Rs 2,621.5 crore under budget estimates for 2022–2023, of which Rs 2,806.92 crore was transferred to the RBI until August 30, 2022.
The interest equalisation programme now serves manufacturers and retailers. However, as service exporters account for approximately 40% of all exports, the business organisation PHD Chamber for Commerce and Industry has asked the government to extend it to them as well. In its budget suggestions, the chamber stated that this would provide MSME exports a much-needed boost.
In the meantime, a recent budget expectation survey by credit rating agency Care Edge, which included 364 respondents from important industries, suggested measures to support goods exporters, including developing export logistic infrastructure, making credit easily accessible, supporting overseas marketing, subsidising credit for MSMEs, providing tax breaks, and expanding the Production Linked Incentive scheme.
Union Budget 2023 proposals to help boost India's exports
According to Commerce and Industry Minister Piyush Goyal, a variety of initiatives, such as adjustments to customs taxes on specific products, outlined in the Union Budget for 2023–24 will aid in boosting the nation's exports. Despite the uncertainty in the global economy, he claimed that India's exports of commodities and services are growing by roughly 14–15% according to Export import trade data.
The world is currently experiencing a recession, and it is anticipated that both global trade and growth will drop. Despite this, we are still in a good place when combining our exports of goods and services. According to Piyush Goyal, we anticipate that the combined increase in goods and services will end the year in double digits.
However, reliable and authentic Export import trade data provides you with the actual information of the countries specific trade. EximPedia is the best platform to analyse updated market information worldwide. If you have any query regarding the India trade data or import export data, our business professionals are always here to provide the best data-driven decisions. Explore more for new updates.