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MSMEs hail Budget 2021 proposals as steps in right direction to boost growth

Finance Minister Nirmala Sitharaman in her Budget speech proposed to double the allocation for MSME sector, and set aside Rs 15,700 crore for the financial year starting April 1.

Abhinav Ranjan Abhinav Ranjan @abhinav_1108
New Delhi Updated on: February 02, 2021 20:35 IST
MSMEs hail Budget 2021 proposals as steps in right direction to boost growth
Image Source : INDIA TV

MSMEs hail Budget 2021 proposals as steps in right direction to boost growth

Micro, small and medium enterprises (MSME) sector has hailed the Budget 2021 proposals as steps in the right direction to boost the growth and address the needs of the unorganized labour force. MSME's Association of Industries president Pramod Dafaria said that the proposal to launch a portal to collect relevant information on gig workers, building/construction workers, among others is an "important step" as it will help formulate health, housing, skill, insurance credit and food schemes for migrant workers.

"We are hopeful that the provision of Rs 15,700 crore in the budget will majorly benefit the small-scale industries," Pramod said.

Rama Kirloskar, Director, Kirloskar Brothers, said that the Budget assumes greater significance as it comes amid the Covid-19 pandemic, which has led to a massive economic disruption in India and around the world.

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Rama said that the measures announced in the Budget will attract global players in the Indian manufacturing sector as the government is planning to offer plug-and-play infrastructure. The special focus on manufacturing will also assist in augmenting Foreign Direct Investment (FDI) in this sector which is undoubtedly the need of the hour.

"The announcement to extend social security benefits to gig and platform workers is also a significant move considering that it now forms an important part of the economy. Minimum wages to all categories of workers will ensure economic development of the blue collar workforce and will impact around 15 million gig workers in India. The move to allow women to work in all categories and also in night shifts with adequate protection will ensure more participation of women in the workforce and further boost economic development," Rama said.

Finance Minister Nirmala Sitharaman in her Budget speech proposed to double the allocation for MSME sector, and set aside Rs 15,700 crore for the financial year starting April 1. In the Budget 2020-21, the government had allocated Rs 7,572.20 crore for the MSME.

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An analysis of the Budget documents revealed that the allocation for Prime Minister's Employment Generation Programme (PMEGP) and other credit support schemes has been hiked significantly from Rs 2,800 crore in 2020-21 (BE) to Rs 12,499.70 crore in the following financial year.

Sitharaman also slashed import duties on a number of steel items in order to provide relief to MSMEs, which have been hit hard by the high cost of raw materials. She reduced customs duty uniformly to 7.5 per cent on semis, flat, and long products of non-alloy, alloy, and stainless steels. Besides, she revoked the anti-dumping duty (ADD) and countervailing duty (CVD) on certain steel products.

"The new custom duty structure that has been introduced on the steel products is somewhat a relief as it has reduced duties on copper from 5% to 2.5%, it has also cut duty on copper scrap from 5% to 2.5%, and exempted duty on steel scrap for a specified period. The industry has seen a hike in the products comprising metal constituents but this will now, somehow help the manufacturers to see stability in the pricing of the products and is a matter of relief for the people," Vinay Jain, founder of Grafdoer, said.

"The 2021 budget announcement previses a positive outlook. The budget is focused on PM's approach towards Atma Nirbhar Bharat, which aligns perfectly with our values as a company," Shashank Agarwal, MD of SalasarTechno Engineering said.

Rajesh Gupta of Busy Accounting Software. providing business accounting software for MSMEs, said that the industry is happy with Rs 15,700 crore allocation and laying of a special framework of Data Analytics, Machine Learning (ML), and Artificial Intelligence (AI) to assist the entire MSME ecosystem and develop them digitally. Still, there are some areas such as Tax regime, Digitalisation, cash flow, easing financing norms for MSMEs, where the stakeholders are hopeful for more positive outcomes from the government.

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