The MSME Factor in Union Budget 2022
MSMEs are Expecting Strong Measures in Union Budget 2022 For a Much Awaited Booster. However, this year's budget is all the more critical for MSMEs as five states are under Elections Phase and MSMEs in these states are priority.
In the upcoming Budget 2022 which is scheduled to be presented on February 1, a big boost for the Ministry of Micro, Small and Medium Enterprises (MSMEs) sector is expected as the Central government does not want to give any more chance to the Opposition to target it over the issue.
Prime Minister Narendra Modi in his entire tenure since 2014, MSMEs remain one of the priority agendas. However, MSMEs’ involvement in top-level policymaking has emerged all the more strongly in the last few years. And from The days of the Aatmanirbhar Bharat Package, the MSME factor became very crucial carrier in the path of economic recovery from the Pandemic.
This year’s Union Budget 2022-23 is expected to bring much needed and awaited reforms for the MSME segment. As this segment holds the complete potential to drive economic growth for the nation.
Modi Government’s top leadership like Union Minister Mr Nitin Gadkari, Mr Piyush Goyal, Finance Minister Mrs Nirmala Sitharaman and also Defence Minister Mr Rajnath Singh all have expressed their strong commitments for the MSME development through their respective departments, schemes and programs. However, Union MSME Minister, Mr Narayan Rane has been actively working in executing result-oriented schemes for MSMEs development.
Schemes like SFURTI, KVIC’s rural job creation initiatives, Credit Guarantee Schemes and many others have been Govt’s top shining success stories in this direction. However, some experts are also considering the development of inclusion of small traders and retailers in the category of MSMEs is also a landmark decision of this government. But more importantly, PLI schemes have been created as a strong roadmap for MSME development.
But, the ground reality has a different looking picture as well. That picture is getting the attention of opposition leaders and considering the fact that in the year 2022 and especially within a few weeks five states are getting into the state elections. This is the time, when state parties, as well as national level opposition parties, are considering MSME-Factor in their electoral agenda.
There are, in fact, reasons for it — the poll-bound states have a good share of MSMEs and the government would not take any chance to let the Opposition label it “as anti-poor, anti-small traders”.
Congress leader and former party president Rahul Gandhi, just after the last year’s Budget, said: “Modi’s crony centric budget means – Struggling MSMEs given no low-interest loans, no GST relief. The employers of India’s largest workforce betrayed.”
It was not the first time that the opposition raised tough questions on the condition of MSMEs during the pandemic.
Rahul Gandhi himself asked at least one question in the parliamentary sessions — from ‘Loss suffered by MSME Sector’ in this winter session to ‘Programmes to Promote Rural Entrepreneurship’ in the last monsoon session, and before these, many others like Wage Subsidy to MSMEs due to Covid-19 Pandemic, Financial Support to MSMEs, Cluster Development Programmes under MSE-CDP, Operational MSMEs in Kerala, Credit Guarantee Fund, Public Procurement Policy for MSEs, Decline in Growth of Registration of MSMEs.
Moreover, Samajwadi Party’s projected CM Candidate Mr Akhilesh Yadav is also pointing out the condition of MSMEs in the state of Uttar Pradesh and are raising some critical aspects of CM Adityanath Yogi’s MSME action plan.
In Uttar Pradesh, Programs like ‘One Product One District’ have been considered as a nationwide success story and UP’s MSME Minister Mr Sidhartha Nath Singh has been acknowledged in media for OPOD Program’s sustainable economic development capabilities. But, it is also strange, that in the last few month’s, since the election phase has started in UP, the MSME agenda seems to be missing in the BJP rallies or meetings.
Also, the Department related Parliamentary Standing Committee on Industry, which comes under the Rajya Sabha, presented a report ‘Impact of Covid-19 pandemic on MSMEs sector and mitigation strategy adopted to counter it pertaining to the ministry of ‘Micro, Small and Medium Enterprises’ in Rajya Sabha on July 27, 2021, which was later also tabled in the Lok Sabha, had many recommendations and also pointed out shortcomings by the government to handle the MSMEs’ grievances during the pandemic.
As part of an examination of the said subject, the Committee deliberated in detail in its meeting held on January 18 and 19, and April 8, 2021, wherein it heard the views of the Ministry of Micro, Small & Medium Enterprises; views/suggestions of MSME Industry Associations like FICCI, FISME, ASSOCHAM, PHDCCI; views of Department of Financial Services; and views of CMDs of leading Banks,0 respectively.
In this report, the Committee observed that the stimulus package announced by the government for the economic revival from the pandemic-hit economy has been found to be inadequate as the measures adopted were more of loan offering and long-term measures instead of improving the cash flow to generate demand as immediate relief.
SMEStreet Foundation is working proactively with MSMEs and their development is the core agenda of the organization, “We at SMEStreet Foundation are concerned for the MSME development in the country. We wish to see stronger MSMEs in the near future. That is possible only when the Central and State Government leadership will work together in building a proactive ecosystem for the entrepreneurs. From credit availability to Job Creation incentivising, MSMEs in India requires a strong push. We must not ignore the data of sick MSMEs and Distressed Entrepreneurs during last 24 months.”
In the process of economic recovery post-first wave of the pandemic, the second wave even more vigorously ripped the economy, particularly the MSME Sector.
The Committee, therefore, recommended that the Government should immediately come out with a larger economic package aimed at bolstering demand, investment, exports and employment generation to help the economy, including MSMEs to recover from the pandemic fall-out.