The Budget has been released, and there are variations and new policies introduced for every country sector, including Micro, Small, and Medium Enterprises. Nirmala Sitharam announced the Budget, where she focuses on three main pillars of inclusive welfare, digital transformation with sustainability, and leveraging private investments. These pillars are aimed to pivot the country from the pandemic situation to ‘India@100’. Also, they can potentially transform and create either a short or long-term impact on MSME and startups’ ecosystems.
One of the worst-hit sectors during the pandemic is MSME. They require additional support in finance, technology revolution, and standing strong in the competition to become a part of the global market. The Union Budget aims to prioritize the revival of MSMEs and give the sector a much-needed boost. About 30% of the national GDP is contributed by MSME and 40% exports, and 45% total manufacturing output. Undoubtedly, there are no two choices about why MSMEs deserves to be a top priority. However, the key points in the Union Budget MSME 2022 as to what changes and support can be expected in this financial year will be discussed herewith. So, keep reading if you want to know more about MSME budget allocation.
Budget 2022 for MSMEs
Here are the key highlights of the Union Budget for MSMEs:
- In terms of Credit
- To bail out from the impact of a pandemic, the government extends the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023, along with the increase in the outlay of funds of upto to Rs. 5 lakh crore.
- Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) is revamped to provide an additional Rs. 2 lakh crore credit.
- The government plans to launch a Rs 6,000-crore-worth programme to rate MSMEs in the next five years.
These moves will ensure that the MSMEs have time and funds to establish their ground and stay in the competition post the pandemic.
- In terms of Taxes and Customer Duty
- To safeguard MSMEs, there is an increase in the basic customs duty (BCD) on importing commonly used commodities, including headphones, earphones, speakers, imitation jewellery, solar modules to promote Make in India.
- The tax incentives have been extended in the Union Budget of 2022 for eligible startups by one more year.
- In terms of digitalisation
- A DESH-stack e-portal will be launched and promote startups for Drone Shakti to promote home-grown digital infrastructure.
- The Budget shows that the government is taking steps towards digital services, records and products.
Final Thoughts on MSME Budget 2022
Increased budget allocation and the key to digital services will undoubtedly increase the level of financial inclusion in MSME sectors, in turn boosting the sector’s resilience and operational efficiency. Moreover, the Budget’s initiative and policies regarding the importance of Credit and liquidity for MSMEs are evident. These new policies will pave the way for MSMEs to access finance and funding easily.
If you want an in-depth knowledge of the Union Budget and its analysis, you can download reports from Dun & Bradstreet’s Budget Manthan 2022. Their comprehensive analysis of the Budget will help you make the most of the benefits and policies.
