As the Finance Minister Nirmala Sitharaman set to present the first Union Budget of Modi 3,0 on July 23, the expectations from various sectors are high.
The Micro, Small & Medium Enterprises (MSME), which vital to economy and need robust support also eyes certain measures for its upliftment from the Finance Minister.
The MSME lenders have suggested that the Union Budget needs to double the loan limit to Rs 20 lakh under the MUDRA Yojana, and expand the credit guarantee cover for unsecured loans for MSMEs from Rs 2 cr to Rs 5 cr.
They also seek measures to reduce financing cost thru interest rate subsidy
Increase loan limits of MUDRA Yojana to Rs 20 lakhs
Navin Saini, Chief Business Officer – Retail & MSME, Arka Fincap said, “I am hopeful that the government will continue its agenda to provide a strong foundation for MSMEs, bolstering their growth. To achieve this, they should consider increasing the loan limits of the Pradhan Mantri MUDRA Yojana (PMMY) scheme from ₹10 lakhs to ₹20 lakhs and expanding the credit guarantee cover for unsecured loans for MSMEs from ₹2 crores to ₹5 crores.”
“These measures will provide MSMEs with greater access to necessary financial resources, enabling them to thrive and contribute significantly to the economy,” he added.
Outlook is cautiously optimistic for MSME sector
Krishan Gopal, CFO, Aye Finance, believed that this budget will lay the groundwork for India’s vision of development by 2047.
“When it comes to the MSME sector, the outlook is cautiously optimistic. Projections suggest a growth rate of about 2.5% CAGR soon. Regular flow of affordable credit will play a critical factor in ensuring this sector delivers to its potential,” the CFO added.
We expect the Government to recognize the efforts of lenders that are transforming micro-enterprise lending in India by providing customized credit lines and announcing schemes and subsidies and even consider classifying them as Priority Sector Lenders, he said.
Reduce financing cost through interest rate subsidy
Expectations for the MSME sector and the NBFC industry are high as both are vital to our economy and need robust support to thrive, said Pankaj Sharma, CEO, Religare Finvest Ltd.
“For MSMEs, we seek measures to reduce financing cost through interest rate subsidy, ease of access to credit, especially for new to credit entrepreneurs through policy measures and comprehensive tax relief and incentives for innovation,” Pankaj said.
Investment in digital infrastructure and skill development is crucial to empower MSMEs with latest technology and boost productivity, he added.
Creating international platform for MSMEs
MSMEs who are focused on creating IPR have no formal funding process to grow internationally it is very important for the Government to find a way to incentivize companies building Products and creating Intellectual Property from India which can be sold worldwide, said Amit Prasad, Founder and CEO, SatNav Technologies.
He said the government has a host of subsidies, incentives and foreign missions who are supposed to promote trade with multiple officers occupying plum posts in countries around the world.
Giving them targets for growth of new business with a focus on IPR based entities can do wonders for our country and give us that next level boost, which can be 100x bigger than the IT Services boom of the past, as we embark on our journey to a Viksit Bharat 2047.
