Budget announcements not adequate, say MSMEs

A section of owners hope the government will come out with more incentives for the sector once the panel submits report

The Micro, Small and Medium Enterprises (MSMEs) feel that the announcements made in the maiden budget by Finance Minister P.T.R. Palanivel Thiaga Rajan were not sufficient for the ailing sector. Whatever sops he announced were good but not sufficient to feed this industry which had been battered by natural calamities and the COVID-19 pandemic, said heads of various industrial estates. In his speech, the Finance Minister said the government recognised that access to credit from banks and Financial Institutions (FIs) was a critical issue. It would, therefore, launch a State-level credit guarantee scheme to enable more MSMEs, particularly micro enterprises, to access credit. He added that a digital data driven credit rating system for MSMEs would be established to enable FIs and new-age fintech companies to lend more to MSMEs based on their business potential. TAICO Bank would be repurposed to help MSMEs. Apart from this, the announcement to amend Registration Act to facilitate online registration of memorandum of documents without personal appearance would ease access to credit. Mr. Rajan also said the government would handhold MSMEs which wanted to raise equity capital from stock exchanges and the cost of listing up to ₹30 lakh would be borne by the government. The government, based on advice received from the Economic Advisory Council, would launch an innovative scheme wherein MSMEs and their creditors, would be facilitated to reach agreement on restructuring their liabilities through tripartite forums at the district level. On reaching agreement, such units would be linked to top-up loans by financial institutions with support from government credit guarantee. “The announcements are inadequate to recover the self-employed entrepreneurs who are not covered from Union government’s stimulus packages,” K.E.Raghunathan, convenor of Consortium of Indian Associations said.