Boosting Growth of SMEs: Insights from Industry Experts
New Delhi: The upcoming Budget 2025 is poised to be a game-changer for small and medium enterprises (SMEs) as industry experts highlight the importance of tax benefits, emerging technologies, and manufacturing zones in fostering growth.
Transforming SMEs through Tax Benefits and Technology
Experts agree that tax incentives aimed at adopting emerging technologies such as Artificial Intelligence (AI) will significantly enhance the growth trajectory of SMEs. They emphasize that AI can reshape traditional business models, streamline operations, and optimize resources.
Nitin Jain, Co-Founder and Chief Business Officer of a prominent Business Group, stresses the necessity for enterprises to integrate AI, automation, and digital tools to elevate productivity and competitiveness within the market.
The Call for Policy Support
Jain suggests that the government should consider introducing dedicated tax benefits and subsidies to facilitate this transition. “Establishing dedicated manufacturing zones equipped with modern infrastructure, seamless supply chains, and shared resources are critical for SMEs looking to scale efficiently,” Jain advises.
SMEs: The Backbone of the Economy
With SMEs contributing 30-35% to India’s GDP and employing over 110 million people, Jain emphasizes the urgent need for robust policy support. He believes that the forthcoming Budget presents an exceptional opportunity to catalyze this economic transformation through strategic interventions.
Investing in Human Capital
“Investing in digital upskilling, financial literacy, and AI-driven training programs is essential to equip SMEs for the rapidly evolving industrial landscape,” Jain commented. This approach will help ensure a sustainable talent pipeline to meet future demands.
Investment Potential in Real Estate and Hospitality
Dinesh Yadav, Founder and Managing Director of Fine Acers, shares insights on the anticipated reforms in the real estate and hospitality sectors. He predicts that the Budget could introduce policy changes that significantly influence future investments.
“Streamlining licensing and compliance processes will be instrumental in attracting substantial investments,” Yadav notes, emphasizing the current challenges faced by the sector.
The Challenges Facing the Hospitality Sector
Yadav observes that the hospitality sector is burdened with complex licensing requirements and multiple approvals. These constraints, alongside high taxation, diminish the appeal of hospitality investments, particularly for capital-intensive projects with extended timelines.
Advocating for Simplified Regulations
“A move towards single-window clearances is vital. It would simplify business operations, reduce costs, and minimize delays, thus fostering a more supportive investment environment,” Yadav argues.
The Road Ahead for SMEs
Both industry leaders firmly believe that the government must prioritize creating a conducive environment for SMEs in the upcoming fiscal policies to ensure sustained economic growth.
Conclusion
As SMEs continue to be a vital component of the Indian economy, the proposed measures in the Budget could unlock immense potential for growth and innovation. With the right support structures in place, these enterprises could thrive and contribute even more significantly to national progress.
Frequently Asked Questions
- 1. What are the proposed tax benefits for SMEs in the upcoming budget?
- The proposed tax benefits will focus on adopting emerging technologies such as AI, aimed at enhancing productivity and competitiveness for SMEs.
- 2. How significant is the contribution of SMEs to the Indian economy?
- SMEs contribute 30-35% to India’s GDP and provide employment to over 110 million people, making them a key segment of the economy.
- 3. What specific measures can support SME growth?
- Introducing tax benefits, establishing dedicated manufacturing zones, streamlining licensing processes, and promoting digital upskilling are significant measures for supporting SME growth.
- 4. What challenges do the hospitality and real estate sectors face?
- These sectors grapple with complex licensing requirements, multiple approvals, and high taxes, which deter investments in capital-intensive projects.
- 5. How could single-window clearances benefit SMEs?
- Single-window clearances would simplify business operations, reduce costs, and minimize delays, creating a more favorable environment for investments and business growth.