Union Budget 2022: How India Will Welcome The MSME Sector To Flourish Sustainably?

Finance Minister Nirmala Sitharaman announced in her budget presentation that the Emergency Credit Line Guarantee Scheme (ECLGS) will be extended until March 2023, and its guarantee cover will be increased by Rs 50,000 crore, bringing the total cover to Rs 5 lakh crore. The additional amount will be allocated purely for hospitality and related enterprises. The extension of the Emergency Credit Line Guarantee Scheme (ECLGS) may help to empower the MSME sector's healthy recovery and sustainable development, and we will examine expert opinions here.

Mr. Sasidhar, MD & CEO of SUB-K has said that "The Budget is a well-marked one in many senses. It rightly strikes a reasonable balance between addressing the key pillars of Health & Well-being, Inclusive Development, Human Capital, Innovation and R&D, apart from laying the path for a robust economy. India's growth is highest among all major economies; we are now in a strong position to withstand challenges. India is now on a path of making the national growth inclusive and the budget 2022 will act as a catalyst for financial inclusion in India."

He further added that "Setting up 75 digital banks, an integrated portal for MSMEs, 100% digitization of post offices and central bank digital currency are welcome moves in this direction. It is financial inclusion that we at SubK not only strongly believe in but are also implementing at the grassroots by leveraging digital technologies, and are glad to see this as a key component of the budget as it is important for the overall balanced economic growth of the country."

Mr. Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital has stated that "Hon'ble Finance Minister today announced an encouraging set of measures, targeted towards the rapid growth of MSME sector and the economy. The extension of the ECLGS scheme by Rs. 50,000 upto March 2023, with a special focus on ailing hospitality sector is crucial to facilitate its faster recovery. The credit support has also been provided in the form of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) revamp with credit of Rs 2 lakh crore for micro and small enterprises. These initiatives will help financial institutions to mitigate risk and stimulate credit outreach to MSMEs."

He also said that "The Government also announced inter-linking of Udyam, e-SHRAM, NCS & ASEEM portals and providing services such as credit facilitation and entrepreneurial opportunities. This will certainly aid in the MSME sector's formalisation and growth. The Government has time and again shown distinctive support to the country's MSME sector and encouraged its contribution to the Atmanirbhar Bharat imperative. The outlay of Rs 6,000 crore for programmes to accelerate MSME performance will surely assist in boosting the sector's resilience and operational efficiency. Overall, the measures announced in Union Budget 2022-23 will unlock rapid recovery and holistic growth of the MSME sector."

Mr. Alok Mittal, Co-Founder & CEO, Indifi Technologies has expressed his budget 2022-23 viewpoint by saying that "This year's budget has taken significant future-forward steps towards financial inclusion; the integration of post office banks, widening the scope of MSME portals and setting up digital banking are all incredible steps in extending access to finance. Moreover, the budget has also addressed the current pain points of the MSME ecosystem by extending ECLGS, with the additional allocation to be earmarked for hospitality and related industries. This provides a renewed impetus for the lending ecosystem to lend to MSMEs and empowers them."

"Steps taken to leverage portals like Udyam, e-shram, NCS & Aseem will go a long way in further strengthening credit facilitation and enhancing entrepreneurial opportunities for MSMEs. In terms of startups, initiatives taken towards amping up the ease of doing business in India are welcome additions to the budget. Moreover, the steps taken for existing start-ups like extending tax redemption and steps taken to attract more investment into the ecosystem is encouraging for the entrepreneurial spirit of India," Mr. Alok Mittal further added.

Mayank Agarwal, Co-founder of Humsafar Diesel Door Delivery startup has said that "The Union Budget of 2022 announced by the government today is a welcome approach as it has drafted many things to boost investments in the country and the startup ecosystem overall. The eligibility of tax exemption claiming tax holidays for startups would be exempted till March 31st, 2023. We welcome this new move focusing on the MSME sector which would further boost the lower end of the spectrum. The new move can also lead to an increase in the demand for diesel door delivery startups. This would encourage budding micro-entrepreneurs to come up in this segment. This had begun last year by introducing Fuelent, this would only further expedite it."

He also added that "The government aims to create 60 lakh jobs in the MSME sector by 2023. This is where industries like ours can play a pivotal role in creating employment. We can pass similar benefits to our Fuelent and build an ecosystem around it. Incentivising OPC Setup: In order to benefit startups in setting up one-person companies (OPCs), Finance Minister Sitharaman announced OPCs to grow without any restrictions on paid-up capital and turnover. The Minister also allowed their conversion into any other type of company at any time and reduced the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allow NRIs to incorporate OPCs in India. We are hoping that with this the NRI are encouraged to invest in smaller setups and if it happens it would be a win-win for both the parties."