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Why Strong Financial Incentives Are Needed by SMEs

Mayank Singhvi brought out in a recent conversation that SMEs may suffer a "double disadvantage" from limited collateral requirements and high borrowing rates. "This gap can be closed with financial incentives including credit guarantees, subsidised loans, and tax rebates," he says. "SMEs can reinvest in innovation, scalability, and job creation by lowering running costs and increasing liquidity."<br>

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Why Strong Financial Incentives Are Needed by SMEs

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  1. Written by Global Innovations A Pre-Budget Analysis by Mayank Singhvi Supporting SMEs Through Financial Incentives With about 30% of GDP and 45% of exports, SMEs remain the backbone of progress as India's economy maintains its upward trend. Still, obstacles include limited money, restrictions on regulations, and global uncertainty abounds. Ahead of the Union Budget 2024, Mayank Singhvi, CEO of Cosmos Financial Group

  2. and a strong supporter of SMEs stresses the immediate necessity of focused financial incentives to release the potential of this sector. Why Strong Financial Incentives Are Needed by SMEs Mayank Singhvi brought out in a recent conversation that SMEs may suffer a "double disadvantage" from limited collateral requirements and high borrowing rates. "This gap can be closed with financial incentives including credit guarantees, subsidised loans, and tax rebates," he says. "SMEs can reinvest in innovation, scalability, and job creation by lowering running costs and increasing liquidity." Key Suggestions Made by Mayank Singhvi Tax Reforms for SMEs ● Faster depreciation helps with technological improvements. ● Longer GST compliance periods help to reduce administrative load. ● Lower corporation tax rates for SMEs funding green projects or R&D from earnings. "Simpler tax rules will free SMEs from bureaucratic bottlenecks," argues Mayank Singhvi. Improved Credit Access ● Priority sector lending objectives set by banks to distribute 15% of loans to SMEs ● Partial credit guarantees help to reduce lender risk and cut interest rates. ● Digital lending systems help to simplify loan applications for underprivileged MSMEs. Mayank Singhvi underlines, "Access to affordable credit is non-negotiable for SMEs survival in a competitive global market." Development of PLI Schemes Already helping manufacturers in areas like electronics and pharmaceuticals, the Production-Linked Incentive (PLI) program should be expanded to SMEs in textiles, agro-processing, and renewable energy. Mayank Singhvi contends,

  3. "PLI-driven financial incentives can make Indian SMEs globally competitive while aligning with 'Make in India' goals." Subsidies for Development of Skills Suggest tax credits for small businesses funding staff upskill initiatives. "A skilled workforce is critical for SMEs to adopt automation and artificial intelligence," argues Mayank Singhvi. Export-Linked Reward Programs Duty drawback programs for SMEs entering foreign markets. Programmes for goods subsidies to help with growing logistics expenses. The Financial Incentive Ripple Effect Mayank Singhvi claims that effectively crafted financial incentives might set off a multiplier effect: With more liquidity, SMEs may create five to seven million new jobs yearly. Encouragement of agro-based SMEs may help to strengthen rural communities. Global Footprint By 2030, export-orientated incentives will enable SMEs to seize $1 trillion worldwide possibilities; obstacles and the road ahead. Although financial incentives are very important, Mayank Singhvi warns against uneven application. "Policies have to be matched with strong monitoring systems to stop abuse," he argues. Additionally, he supports single-window clearing methods for expeditious regulatory clearances. SME database digital integration to enhance policy targeting. In Essence, a Call for Strong Policy Action Mayank Singhvi exhorts legislators to give SMEs top priority when the Union Budget 2024 comes around. He says, "Empowering SMEs is a strategy for inclusive growth, not only economic policy." Using deliberate tax changes, loan availability, and export assistance, India can position its SMEs as engines of a $5 trillion economy. The equation is obvious for Mayank Singhvi: financial incentives now will drive Indian entrepreneurship tomorrow. For more ideas on SME finance and economic policy, follow Mayank Singhvi and Cosmos Financial Group.

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