The ongoing third wave of COVID-19 infections has battered the already distressed Medium, Small and Micro Enterprises (MSME) sector in India. The MSME sector holds a significant value in the Indian economy as the share of MSME Gross Value Added (GVA) in India's GDP at current prices for the year 2019-20 stands at 30 per cent. But the sector, reeling under COVID-19 infections, is looking up to the announcements in the Budget that can pull the sector out of the gloom.
The sector which faces immense problems in getting access to credit is expecting some measures to avail hassle-free credit.
"In the upcoming Budget, we suggest hassle-free credit availability to industry, particularly for MSMEs; ease of doing business for the MSMEs; reduced costs of doing business; level playing field for the industry; and timely justice for people and industry," said Pradeep Multani, Chairman, PHDCCI.
While on the credit front, Prof. V Padmanand, Partner, Grant Thornton Bharat LLP, said, "There is need for faster clearance of dues to MSMEs. There is also scope to on-board more state government departments and state public sector units into the Trade Receivables and Discounting (TReDS) platform."
According to Padmanand, there is also merit in encouraging financial institutions to evolve cluster-based financing instruments to make the financial sector more responsive to distinct needs of cluster MSMEs in terms of ballooning requirements.
However, there is one demand in unison that is the extension of ECLGS. "We suggest extension in the timeline of Emergency Credit Line guarantee Scheme (ECLGS) for another year till 31st March 2023 and extension of the reduced rate of performance security at 3 per cent for one more year till 31st December 2022," Multani added.
To give a fresh impetus to exports from MSMEs, Multani wants export income should be made tax free for MSMEs for 3 years and income of large enterprises from incremental exports (Y-o-Y) to be made tax free.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today