I must begin with congratulating all the entrepreneurs who are successfully surviving from the tough times of the Pandemic. We are on the track of economic recovery and the challenges are not over yet. well, in my observation, this was the main thought process behind the Union Budget 2022-23.
The track of economic recovery is getting traced, there is a lot that MSMEs were expecting from the Hon’ble Finance Minister ahead of her speech.
The Budget 2022 speech has some very positive takeaways for MSMEs and startups for example the extension of the ECLG Scheme. This was expected and needed the most. The extension of another three years shows the Government has a grounded understanding of the impacts of the pandemic which is going to last for another couple of years.
In addition to the aforementioned, the announcement of additional aid of Two Lakh Crores for MSMEs is also a great booster. Apart from the corporate tax slab reduction will also going to influence positively to SMEs. This additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE). However, the convergence of MSME portals such as Udyam, eSHRAM, NCS and ASEEM and will now perform with live, organic databases providing G2C, B2C and B2B services. This will enable credit facilitation, skilling and recruitment for MSMEs with an aim to formalize the economy and promote entrepreneurship.
Here are Top MSME Centric Takeaways from Union Budget 2022
- Udyam, e-shram, NCS and ASEEM portals to be interlinked.
- 130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS)
- ECLGS to be extended up to March 2023.
- Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of Rs 5 Lakh Crore.
- Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
- Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6000 Crore to be rolled out.
I consider that the only thing which could have added much thrust on this most important driver of the economy could be the announcement or expansion of the Fund of Funds. MSME Banking could also be an area where government’s intervention can bring great results.
While the industry is coming out in large numbers with positive feedback on FM Sitharaman’s announcements.
While congratulating MSME entrepreneurs for a balanced and motivating Union Budget 2022, Mr. Nikhil Arora, Vice President and Managing Director, GoDaddy India said, “The 2022-23 budget overall finely balanced fiscal retreat with supporting economic recovery and skilling. The proposed reforms especially those focused towards MSMEs and start-ups, such as the expansion of the ECLGS scheme for another year, are a welcome move for both credit facilitation and boosting entrepreneurial opportunities in the country. We believe that the financial support of five lakh crores will help to encourage young entrepreneurs to come forth and explore new avenues. In addition, the decision to interlink portals like UDYAM, e-SHRAM, National Career Service (NCS), and ASEEM will help in formalizing the sector and be positioned to create additional job opportunities. The launch of Digital DESH e-portal for skilling, reskilling, and upskilling of the existing talent will also help to pave the way for building a dynamic workforce for future growth. As the country looks forward to these encouraging initiatives and more to boost small businesses, GoDaddy will continue to support Indian small businesses and entrepreneurs helping their ventures successfully come and grow online.”
While welcoming the Union Budget 2022, Mr Dinesh Agarwal, Founder & CEO, IndiaMART InterMESH Limited stated, “With respect to the MSME sector, we congratulate the Union Budget 2022 for the vision. MSMEs will be supported through an extension of the Emergency Credit Line Guarantee Scheme (ECLGS) through March 2023, which will increase the guarantee cover by Rs 50,000 crore to Rs 5 lakh crore. The ‘Effective Capital Expenditure’ which is estimated at INR 10.68 lakh crore will be about 4.1 percent of GDP implies that Government is focused on strengthening domestic industry which will aid economic growth and job creation. This year’s Budget also emphasized on the startup ecosystem. Furthermore, the focus on digitization will strengthen online marketplaces to reach a wider audience, thereby creating a path for strong growth. The tone of the Budget was clearly pointing toward the priority areas defined as engines of growth for becoming a 5 trillion economy. It was a genuine effort to meet the GDP target as envisaged in the Economic Survey; we wish to see the year as the ‘year of growth’.
highlighting another aspect of MSMEs, Sarosh Amaria, Managing Director, Tata Capital Financial Services Limited quoted, “The Government has continued its support to MSME sector with measures announced in the Budget like extension of ECLGS scheme and integration of digital portals. Higher allocation towards capital expenditure at Rs. 7.5 lac crores will aid the industry in sustaining recovery after the pandemic.”
Propelling MSME growth through enhanced financial access and support announcements in Union Budget 2022 speech, Mr Sushil Pasricha, Partner, Bain & Company commented, “In MSME sector (which employs 40% of country’s workforce and contributes to 30% GDP), the Government has extended Emergency Credit Line Guarantee Scheme (ECLGS) up to March 2023. The guarantee cover has extended by another INR 50,000 crore and total cover under scheme now is INR 5 lakh crore. This will enable credit facilities to MSMEs to meet their additional working capital requirements. The extension of this scheme will especially help hospitality and related services within MSMEs which were adversely affected by the pandemic.”
INR 6,000 crore Raising and Accelerating MSME Performance (RAMP) programme will be rolled out over 5 years. Extension of single-window clearance beyond green projects will facilitate in ease of doing business for the MSME sector.