Tax Benefits for Emerging Technologies and Expanded Credit Guarantees in Budget to Support SMEs Growth

Experts suggest that tax incentives for adopting new technologies like AI, the establishment of dedicated manufacturing zones, and expanded credit guarantee schemes in the Budget could significantly enhance SME growth. They believe AI-driven credit assessments can simplify loan processes and broaden credit access for small and medium enterprises.

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Nitin Jain, Co-Founder and Chief Business Officer of OfBusiness Group, emphasised the need for enterprises to integrate AI, automation, and digital tools to boost productivity and competitiveness. He advocated for tax benefits and subsidies to support this transition. Jain also highlighted the importance of creating manufacturing zones with modern infrastructure and shared resources to help SMEs scale efficiently.

AI Integration and Policy Support

Jain noted that SMEs contribute 30-35% to GDP and employ over 110 million people, necessitating strong policy support for scaling manufacturing and accessing affordable credit. The upcoming budget offers a chance for strategic interventions to drive this transformation. Investing in digital upskilling, financial literacy, and AI-driven training programs will prepare SMEs for the evolving industrial landscape, ensuring a sustainable talent pipeline.

Dinesh Yadav, Founder and Managing Director of Fine Acers, expressed hopes that Budget 2025 will bring policy reforms beneficial to the real estate and hospitality sectors. He pointed out that simplifying licensing and compliance processes could attract significant investments. Currently, complex licensing requirements, multiple approvals, and high taxes deter investments in hospitality, especially for capital-intensive projects with long gestation periods.

Streamlining Processes for Investment

Yadav suggested that moving towards single-window clearances would simplify business operations, reduce costs, and minimize delays. Such measures could make hospitality investments more attractive by addressing existing challenges in the sector.

The focus on AI integration and streamlined processes reflects a broader strategy to enhance SME growth through technological adoption and policy support. By addressing these areas in the budget, the government aims to create a conducive environment for SMEs to thrive.