July 13, 2024

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The Rs 8,819.8 crore budget allocation for 2023 will boost SMEs, EV startups, and battery manufacturers
The Rs 8,819.8 crore budget allocation for 2023 will boost SMEs, EV startups, and battery manufacturers

The Rs 8,819.8 crore budget allocation for 2023 will boost SMEs, EV startups, and battery manufacturers

To encourage a startup culture, the government has extended the incorporation period by one year, until April 1, 2024


 

SMEs, EV start-ups, and battery makers will be the biggest winners of the Rs 8,819.8 billion allocated in the 2023 federal budget for climate-related actions. This amount represents 2.0% of total spending in FY2024 compared to 0.9% in FY2023.

 

Growth engines in these sectors are poised for a significant boost in green adoption as these provisions are revenue expenditures tied together through subsidies.

 

To encourage a startup culture, the government has extended the incorporation period by one year, until April 1, 2024, to take advantage of the tax incentives they described. Even if the participants change from 7 to 10 years old, the startup can carry forward the deficit.

A corpus infusion of around 9,000 kroner will additionally enable him to make an unsecured guaranteed loan of 20 billion rupees. It also contributes to the rapid growth of Micro, Small, and Medium Enterprises (MSMEs) credit and allows him to reduce borrowing costs by 1%.

 

 

The turnover cap under the presumed small business tax has been amended from Rs 2 crore to Rs 3 crore. In addition, the loss carry-forward provisions when a startup changes ownership have been extended from 7 years to 10 years from the date of incorporation. “This is likely to reduce taxable income by 20% and improve margins for SMEs by 7.5%, assuming a turnover of INR 30 million,” said a tax and financial analyst.

 

Anshul Gupta, Managing Director of Okaya Electric Vehicles, a medium-sized electric vehicle manufacturer, said: “It offers better returns, especially for the private sector”.

According to CRISIL estimates, the 4 GWh battery projects supported by the government through Viability Gap Funding will account for 2.7 percent of the total battery storage demand of 150 Gwh (37.5 GW) and 1.7 percent of the total storage demand of 220 Gwh (55 GW) till FY 2031.

 

 

“The pumped storage policy will enable an estimated 22 GW of projects by FY2031, of which about 7 GW of infrastructure will be built by private actors. Overall, this is a step in the right direction for India’s clean energy transition. It’s a small step, it’s progress,” argues the CRISIL analyst.

 

Barnik Mitra, Managing Partner, Arthur D. Little India said the biggest gain from the 2023 budget will be capital expenditure totalling Rs 150 crore, considering central subsidies and government loans, an unprecedented budget in India’s history of 5% of GDP. I said it was an allocation. Maitra also said this huge investment growth will also spur growth in the SME sector, saying the government’s strategy is to encourage private investment through a significant allocation of the state capital.

 

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