A provision of Rs 15,700 crore for the Ministry of Micro, Small and Medium Enterprises (MSME) sector in the Union Budget 2021-22 by Finance Minister Nirmala Sitharaman.
“We have taken a number of steps to support the MSME sector in this budget. I have provided Rs 15,700 crore more than double the previous year,” said Sitharaman while presenting the Union Budget in the Parliament.
“Financial Inclusion: To further facilitate credit flow under the scheme of Stand Up India for the Scheduled Caste and Scheduled Tribes and also women, I propose to reduce the margin money requirement from 25 percent 15 percent only and to also include loans for activities in allied activities in agriculture,” the Finance Minister added.
While presenting the Budget, Sitharaman said, only three times has the Budget followed a contraction in the economy this time, unlike before, the situation is due to a global pandemic Budget-2021 provides every opportunity for the economy to capture the pace and grow sustainably.
“The preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with COVID-19 to 2020 is Sui generis,” she added.
Industry stalwarts have welcomes the steps taken by the Finance Minister to boost MSME sector in India.
Kapil Makhija, CEO, Unicommerce: “We appreciate the government’s continued push towards digitization and strong infrastructure. The focus on development of roadways, dedicated freight corridor and airports will provide a great boost to logistic sector enabling faster product movement across the country. The strong road and rail connectivity will also help in making e-commerce logistics more sustainable in smaller towns, leading to higher growth of the e-commerce sector. We are optimistic that the government’s focus on encouraging digital transactions and strong push towards manufacturing in India, will boost the e-commerce growth in in the long run.
The pandemic led to the acceleration of digitization across levels as online shopping became the new necessity and organizations were seen automating processes with technology solutions to bring in more efficiency. We are confident that upcoming e-commerce policy will provide further support to the industry and encourage MSME’s to join the e-commerce brand wagon.”
Mahesh Shukla, Founder, PayMe India: “The Budget has largely been a good one. The boost in the online payment sector is a good measure for the growth of the industry. The proposed Rs 1,500 crore investment will help tech businesses develop cutting edge technology and boost the sector. It will also help attract investors and facilitate development. The fintech hub will strongly contribute to job creation and help the economy recover considerably. The loan boost and tax holiday for financial institutions in the SMEs and MSMEs are highly encouraging given the tumultuous year we've had.
Ashish Jain, Director and CEO, iatric Industries Pvt. Ltd. – Von Wellx Germany: "After one of the toughest years for the economy, the biggest positive of the budget is that there are no negatives like major increased burden on the business with special covid cess, taxes or so.
While at the same time, they have tried several measures to simplify business challenges, easier compliance showing moves in the right direction. Ease of doing business with less compliance in terms of reopening of cases, Creation of level playing field with increased custom duties, Motivation for MSME and startup with tax holiday extension and higher coverage limits, Increasing spending in infrastructure and health care.”
Sharad Bhatt, CFO, Eolstocks.com: “The union budget 2021 has quite several steps to support the MSME sector. Measures announced for financial Inclusion and reduction of the margin money requirement from 25 percent to 15 percent will boost their growth. The budget aims to benefit many of our customer segments and will benefit us as well. Recent announcement of the Startup Seed Fund has already boosted the morale of the startup ecosystem and we are really hopeful for the coming year.
Sandip Chhettri, COO, Tradeindia: “Budget announcement on tax breaks for startups is welcome news. The extension in capital gains exemption by one year is a move that will help the startups sector recover from the brunt of the pandemic.It is encouraging again that the Finance Minister proposes to reduce margin money requirements from 25 percent to 15 percent for startups. This reflects the effort of the government to prop up the sector.As far as MSMEs are concerned, it is good news that the Centre has decided to double the allocation for the sector. The Government now plans to set aside Rs 15,700 crore in FY22, and if this decision is implemented wisely in the coming days, the sector would definitely benefit"
Lokendra Ranawat, Founder & CEO, WoodenStreet: “The budget was awaited with a lot of expectations and of that most have been met. Infrastructure & healthcare were the main spotlights of budget 2021 and a large investment has been allocated for the expansion of the road network. Also, just like it was predicted, Startups were given importance in this budget as well. The tax-exempt on the revenue, as well as investments, have been increased by one more year which will be beneficial for the startup growth in the country. On the other hand, the investment in MSMEs and the moratorium on loans of up to 2Cr will also play a crucial role in for the Indian corporates. Privatization of several government-related sectors such as ports will also add to the economic growth and employment generation.
Raghunandan Saraf, Founder & CEO, Saraf Furniture: "Finance Minister Nirmala Sithraman by announcing that Modi government will introduce a bill for the development of financial institution has shown a clear path for the growth on financial infrastructure in the Atmanirbhar Bharat. Further, Modi government's announcement of a sharp increase in Capital Expenditure and thus providing Rs 5.54 lakh crore will develop momentum for financial infrastructure domain. Further, the announcement of the development of investor charter should also be welcome as it will protect the hard-earned money of a number of investors."