Can We Expect A Great reset for MSMEs in Union Budget 2021?
On Febuary 2020, Finance Minister Nirmala Sitharaman presented a Union Budget which highlighted the MSMEs as the central attraction for economic recovery. Last year earmarked an all-time high allocation of Rs 7,572.20 crore for the Ministry of Micro, Small and Medium Enterprises while announcing a string of initiatives for the sector including raising the turnover threshold for an audit of their accounts to Rs 5 crore and a scheme to provide subordinated debt to MSME entrepreneurs. This sets a very strong message for entire MSME sector which consists of over 6.5 crore MSME units across India.
But, within a few weeks of this announcement, COVID made it’s an unwanted entry into India and very rapidly it gripped the economic cycle of the country. The scary spread of COVID pandemic forced top policymakers to consider a nationwide lockdown which caused a massive hit to this sector.The flagship employment generation scheme of the ministry, Prime Minister Employment Generation Programme, has got an all-time high allocation of Rs 2,500 crore for generating self-employment opportunities through establishment of micro-enterprises in non-farm sector by helping traditional artisans and rural/urban unemployed youth.
These last 11 months or so have been so challenging for the MSME sector although, from April 2020 onwards, the Finance Ministry has come out with MSME -focused schemes and programs which contributed in providing support to the MSMEs to recover. But, efforts after efforts have been made, a series of MSME focused Credit-related scheme announcements were made, but the sector is still trying to stand from this pandemic blow.
This year’s Union Budget 2021, is another opportunity for MSMEs to expect something lucrative which could help them in chasing the growth path.
SMEStreet Pre-Budget Survey Highlights
SMEStreet has conducted a nationwide MSME outreach exercise in which we tried to identify some key expectations.