Budget 2025 Introduces Revolutionary Changes to Make Doing Business Easier
In her eighth consecutive Union Budget presentation, Finance Minister Nirmala Sitharaman announced significant reforms to facilitate commercial transactions and initiatives to assist startups and MSMEs.
Ms. Sitharaman declared that the rules and processes for approving business mergers quickly will be streamlined. She continued, “In the last 10 years, many aspects of the government have demonstrated steadfast commitment to ease of doing business.”
A high-level group for regulatory reforms in the non-financial sector will be established, according to the government’s announcement. “The Centre will aim to strengthen trust-based economic governance to ensure the ease of doing business,” she explained. The high-level committee will examine all laws, permits, certifications, and licenses pertaining to the non-financial industry.
The government will also create a state-by-state investment-friendliness ranking. Alongside the initiatives is an increase in finance for Indian entrepreneurs and MSMEs. Additionally, Jan Vishwas Bill 2.0 will aid businesses by decriminalising more than 100 provisions under different statutes.
The Financial Stability and Development Council will establish a framework to assess the effects of the current financial rules.
Additionally, Ms. Sitharaman announced corporate tax changes. “A tax exemption will be provided on withdrawals made from the National Savings Scheme by individuals on or after 29th August 2024, along with a scheme to be introduced for determining arm’s length price of international transactions for a block period of three years, to streamline transfer pricing and to provide an alternative to yearly examination.”
“MSME, as a second engine, encompasses manufacturing and services with a focus on MSME numbering 5.7 crore. Currently, over 1 crore registered MSMEs employing 7.5 crore people and generating 36% of our manufacturing have come together to position India as a global manufacturing hub,” Ms Sitharaman explained.
The government would increase the loan guarantee coverage for micro and small businesses from the existing Rs 5 crore to Rs 10 crore, according to Ms. Sitharaman. According to her, an extra Rs 1.5 lakh crore in loans will be provided over the following five years. In order to support ‘Aatmanirbhar’ Bharat, Ms. Sitharaman said that the credit guarantee cover for startups will be increased from the existing Rs 10 crore to Rs 20 crore, with a guarantee charge reduced to 1% for loans in 27 target sectors.
