The Union Budget is just around the corner, and the SMEs and MSMEs — the engines of economic growth and employment generation — have high expectations. They are hopeful that the Budget would deliver strategic and structural reforms to support their resilience and enable them to scale new heights.
According to an industry expert, the current economic slowdown is being influenced by multiple factors such as geopolitical instabilities, reduced capital spending by the government, poor export performance and sluggish growth in the manufacturing sector. However, with the right support measures, the SME/MSME sector, can be reinvigorated for growth. Among the key expectations and predictions in the upcoming budget includes:
SMEs often face significant challenges in securing affordable and timely credit. Measures to improve access to credit will be essential in enabling their growth and survival in a volatile economy. Industrialists suggested that the upcoming Budget should provide an additional allocation or net to enhance credit flow to the MSMEs, much like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) launched during Covid, which proved to be a lifeline driving the growth of MSMEs
As the largest employment generator, SMEs require a continued emphasis on skill development initiatives. Programmes that upskill the workforce will ensure enhanced productivity and competitiveness for the sector. The President of the ASSOCHAM said there’s a need to establish MSME universities to promote skill development and entrepreneurship training.
Besides, tax breaks and subsidies on capital expenditures can provide much-needed relief to the sector.
ASSOCHAM highlighted the need to develop integrated infrastructure townships for MSMEs (a revised version of the old Industrial Estate Development Programme). These townships may include facilities such as common testing and R&D centres, Financial institutions, common service providers and housing.
