The Micro, Small & Medium Enterprises (MSME) sector in India is fervently appealing to Finance Minister Nirmala Sitharaman for a dedicated financial package aimed at boosting the sector’s growth. As the Finance Minister is set to present the interim Budget 2023-24 in the Lok Sabha on February 1, the MSME community is seeking measures to enhance the availability of institutional credit at competitive rates.
In a bid to fortify the MSME sector’s pivotal role in India’s journey towards a USD 5 trillion economy, industry leaders are calling for a comprehensive approach to address the challenges faced by these enterprises. The share of the MSME sector in the country’s Gross Domestic Product (GDP) was 29.15 per cent in the fiscal year 2021-22, underscoring its significance in the economic landscape.
Federation of Indian Micro and Small & Medium Enterprises (FISME) Secretary General Anil Bhardwaj highlighted the uneven relationship between banks and MSMEs, emphasizing the need for a more balanced power dynamic. Bhardwaj expressed concerns about the lack of competition in the banking sector and the inefficacy of the grievance redressal mechanism, urging Finance Minister Sitharaman to address these issues in the upcoming budget.
The export contribution of MSME-specified products to the country’s overall exports saw a positive trend, reaching 45.56 per cent in 2023-24 (up to September 2023). However, only 6 per cent of MSMEs actively engage in e-commerce platforms, signaling a potential area for growth.
Consultancy firm Deloitte recommended the promotion of risk mitigation tools, such as credit guarantees and insurance schemes, to reduce capital flow risks, especially in industries like automotive, electronics, industrial machinery, and chemicals.
Puneet Kaura, Chairman of CII Delhi State and MD & CEO of Samtel Avionics, stressed the pivotal role of the MSME sector in employment generation, manufacturing growth, and export promotion. Kaura underscored the sector’s need for timely credit at competitive costs and called for a special package to ensure the sustained growth of small and medium enterprises.
Rohit Arora, CEO and Co-founder of Biz2X and Biz2Credit, anticipates a budget prioritizing financial inclusion, ease of doing business, and investments in digital infrastructure and skill development. He believes that simplified regulatory procedures and reduced compliance burdens can empower startups and MSMEs.
The Union Budget 2023-24 had allocated Rs 22,137.95 crore for the MSME ministry, a 41.6 per cent increase from the previous fiscal year. Expectations are high for even more significant allocations in the upcoming budget.
As the MSME sector eagerly awaits the interim Budget, various stakeholders are optimistic that targeted measures and relief packages will be introduced to address the unique challenges and opportunities faced by these enterprises.
