Budget FY23: Big boost to MSMEs expected

By Nimish Kumar

New Delhi, Jan 24 : 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.

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.

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 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 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.

The Committee also obtained information through its Questionnaires on the subject from the M/o MSME, MSME Associations, Department of Financial Services and Banks.

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.

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.