VIVAD SE VISHWAS SCHEME -UPSC Current Affairs

Description

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Context: As declared in the Union Budget 2023-24, the government has launched the Vivad se Vishwas scheme to provide support to MSMEs for the COVID-19 period.

Vivad se Vishwas scheme

About

The "Vivad se Vishwas I - Relief to MSMEs" scheme has been launched by the Department of Expenditure, Ministry of Finance, to provide relief to Micro, Small and Medium Enterprises (MSMEs) during the COVID-19 period.
The scheme was announced in the Union Budget 2023-24.

Objectives

Provide relief to the micro, small and medium enterprises (MSMEs) that have been affected by the COVID-19 pandemic.
To resolve pending tax disputes and reduce litigation.

Key Provisions

It offers a one-time opportunity for MSMEs to settle their pending tax disputes by paying only the disputed tax amount and getting a waiver of interest and penalty.
It provides immunity from any future prosecution or penalty for the settled cases.
The scheme is applicable for all tax disputes pending as on 31st March 2023, irrespective of the stage of litigation.

Significance

Benefit MSMEs that are struggling with cash flow problems due to the Covid-19 pandemic and the economic slowdown.
Reducing the pendency of tax litigation and improving the ease of doing business in India.
Support the MSME sector, which is considered the backbone of the Indian economy. The sector contributes about 30% of the GDP, 45% of the exports and employs over 11 crore people.
The scheme is part of a Comprehensive approach; the Government has also taken various other measures to help MSMEs such as providing collateral-free loans, revising the definition of MSMEs, creating a dedicated portal for MSME registration and grievance redressal, etc.

Conclusion

The Vivad se Vishwas scheme is a welcome step by the Government to provide relief to MSMEs and resolve their tax disputes in a hassle-free manner. The scheme will not only help MSMEs in saving time and money but also in improving their compliance and trust with the tax authorities. The scheme will also boost the morale and confidence of MSMEs and encourage them to grow and innovate in the post-pandemic scenario.

Must Read Articles:

MSME Sector: https://www.iasgyan.in/daily-current-affairs/msme-sector-14

PRACTICE QUESTION

Q. The micro, small and medium enterprises (MSME) sector is a vital component of the economy, contributing to employment, innovation and growth. However, the MSME sector faces many challenges, such as a lack of access to finance, technology, markets and skilled manpower. How can financial support to the MSME sector be enhanced and optimized to address its challenges and foster its development sustainably and inclusively?