In the budget for the financial year 2022-23 presented today by Finance Minister Nirmala Sitharaman, a slew of measures to help bolster India’s Ministry of Micro, Small & Medium Enterprises (MSME) sector have been announced. The Finance Minister while presenting the Union Budget announced revamping the credit guarantee scheme for the MSME sector and allotted Rs 9000 crores of capital towards the scheme.
The introduction of a new credit guarantee scheme would provide MSMEs with an extra Rs 2 lakh crore in collateral-free finance. As a result of this, the cost of credit for the MSME sector will reduce by 1%. The scheme would take effect from April 1, 2023.
“Last year, I proposed revamping of the credit guarantee scheme for MSMEs. I am happy to announce that the revamped scheme will take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus. This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit will be reduced by about 1 per cent,” Sitharaman said in her budget speech.
The Finance Minister also stated that India’s MSME sector would get more relief through Vivad se Vishwas Act with a less stringent contract execution system. “This will help settle contractual disputes and will also help the MSMEs affected due to COVID pandemic,” she said. She also conceptualized PM Vishwa Karma Kaushal Samman’s package of assistance for traditional artisans and craftspeople which is slated to help them in integrating with the MSME value chain.
The Budget 2023-24 also focused on providing tax benefits to the MSME sector.”Enhanced limits for micro-enterprises and professionals to micro-enterprises of presumptive taxation; 95 percent of receipts to be noncash. Deduction on payments made noncash to be allowed only when payment is actually made,” the Budget specifically quoted.
Here are some more Budget proposals announced for the MSME sector
1. To boost domestic tourism, the Centre will launch the ‘Dekho Apna Desh’ project.
2. The government will establish a National Financial Information Registry to facilitate the efficient flow of credit and promote financial stability.
3. Financial sector authorities will be tasked with conducting a thorough assessment of existing regulations.
4. An integrated IT site for recovering unclaimed shares and dividends will be launched.
5. In addition, the government will establish a single-window system for registrations and approvals in IFSC Gift City.
6. A Central Processing Centre will also be established to respond to corporations filing documents under the Companies Act more quickly.
7. The FM also stated that a one-time new modest savings plan called the Mahila Samman Saving Certificate will be made available for two years, till 2025.
Earlier last year, the Finance Minister had extended the Emergency Credit Line till March 2023 for the MSME sector. The guarantee cover had been extended by another Rs. 50,000 crores taking the total cover under the scheme to Rs. 5,00,000 crores. The government had also decided to roll out Raising and Accelerating MSME Performance (RAMP), an initiative to revitalize the MSME sector that has been heavily impacted by the COVID-19 pandemic.
The Budget 2023 focused on seven goals, dubbed the Saptrishis leading the country through Amrit Kaal, by the Finance Minister. These are inclusive development, reaching the last mile, infrastructure and investment, unleashing potential, green growth, youth power, and financial sector”. Budget 2023 has also been dubbed as the first Budget of Amrit Kaal and the roadmap for India@100, by the Finance Minister.
Sitharaman while announcing the budget also said that economy in the current year would grow at 7 per cent. “This is the most of any big economy. Despite the difficulties, India is on the right course. Since 2014, the government’s efforts have resulted in improved quality of life. Many development targets have seen tremendous improvement,” she said.
Since 2014, the government’s efforts have provided a higher quality of life and a life of dignity for all residents. The per capita income has more than doubled to Rs 1.97 lakhs. According to FM Sitharaman, the Indian economy has grown from the tenth to the fifth largest in the globe in the last nine years.
