Transforming MSMEs in 2024: Game-Changing Policies You Need to Know!
As we set our sights on 2024, the landscape for Micro, Small, and Medium Enterprises (MSMEs) in the United States is gearing up for a remarkable transformation. With pivotal reforms and a slew of exciting initiatives, this year aims to tackle nagging challenges head-on and supercharge entrepreneurial spirit across the nation. We’re witnessing a dynamic shift as the government steps in to address long-standing issues like delayed payments and to bolster support for the backbone of our economy—small businesses.
However, it’s not all smooth sailing. While significant strides have been made, many MSMEs still grapple with daunting obstacles. Inflation and rising input costs remain formidable foes, as countless small businesses struggle to pass these expenses onto their customers. Compounding this predicament are geopolitical tensions and the unpredictability of global markets, which have disrupted supply chains, particularly for those relying on imported materials or export opportunities.
As we enter 2025 with renewed hope for a more supportive ecosystem, let’s take a moment to spotlight some of the most noteworthy announcements from the government in 2024 aimed at empowering small businesses:
Revised Section 43B of the Income Tax Act
One of the most significant moves was the introduction of a new clause under Section 43B of the Income Tax Act, designed to combat the issue of delayed payments that plague small businesses. This reform stipulates that buyers can only deduct expenses for invoices from micro and small enterprises if paid within 45 days, or even within 15 days if no agreement exists. This is a game-changer for cash-strapped MSMEs struggling with cash flow.
New MSME Minister
In June, the government welcomed a new face to the helm of the MSME Ministry. The appointment of Jitan Ram Manjhi, a prominent leader and former Chief Minister of Bihar, promises to bring fresh perspectives and energy to drive initiatives forward. With his experience and commitment, there’s optimism that he will champion small businesses effectively.
TEAM Scheme Launched
June also marked the launch of the Trade Enablement & Marketing (TEAM) scheme, backed by a robust budget of Rs 277.35 crore over three years. This initiative aims to enhance e-commerce access for micro and small enterprises through the Open Network for Digital Commerce (ONDC), ensuring that 5 lakh MSMEs benefit, with a significant focus on women-led businesses.
Revised Form for Delayed Payments
Under new regulations, companies that delay payments to micro and small enterprises for over 45 days must now provide detailed information through a revised MSME form. This transparency is crucial in holding larger companies accountable and ensuring timely payments to small suppliers.
Reduced GeM Transaction Charges
August brought great news for sellers as the Government eMarketplace (GeM) slashed transaction charges, especially benefiting micro and small sellers. For orders up to Rs 10 lakh, the transaction fee has been completely waived, making it easier for small businesses to compete and thrive.
Enhanced Coverage under CGTMSE for Women Entrepreneurs
In September, the MSME Ministry announced an increase in credit guarantee coverage for women-owned micro and small enterprises under the CGTMSE scheme to a remarkable 90%. This initiative aims to empower over 27 lakh women entrepreneurs, providing them with the financial backing they need to succeed.
Extension of Interest Equalisation Scheme
October saw a crucial extension of the interest equalisation scheme, now available until December 31, 2024, offering vital support for MSME manufacturers involved in exports. This extension is essential for sustaining growth amid ongoing challenges.
Increased Khadi Wages
The Khadi and Village Industries Commission also took steps to uplift artisans, implementing wage increases for khadi spinners and weavers. Such measures not only enhance the livelihood of these skilled workers but also honor our rich heritage.
Enhanced Mudra Limit
In a significant boost for entrepreneurs, the Finance Ministry raised the Mudra loan limit to Rs 20 lakh. This expansion is a golden opportunity for small business owners to access crucial funding needed to scale their operations.
TReDS Turnover Threshold
November’s revision of the TReDS turnover threshold will allow more companies, including central public sector enterprises, to join the RBI’s invoice discounting platform, increasing liquidity for MSMEs and reinforcing their role in the economy.
SEBI Regulations for SME IPOs
Finally, the Securities and Exchange Board of India (SEBI) introduced new regulations for SME IPOs, ensuring greater accountability and stability in the market. This will safeguard investors while providing MSMEs the opportunity to raise capital effectively.
