Budget's MSME Focus
The Union Budget presented several key initiatives designed to provide financial and infrastructural support to the MSME sector. These measures included the introduction of a dedicated SME Growth Fund
worth Rs 10,000 crore. Additionally, the government proposed incentives for enterprises based on specific criteria, and provided additional funding to the Self-Reliant India Fund, increasing its capital by Rs 2,000 crore. These steps were widely recognized as positive moves aimed at boosting the MSME sector, with a potential impact on employment and economic growth. Furthermore, the budget included provisions for infrastructure development, specifically the Dankuni-Surat freight line, Durgapur's East Coast Corridor hub, and the Varanasi-Siliguri express rail. These projects are anticipated to reduce transportation costs for small businesses by 20% to 30%, which is expected to enhance their competitiveness and operational efficiency.
Infrastructure Improvements Announced
The budget strategically focused on enhancing infrastructure, specifically mentioning developments that would directly benefit MSMEs. The introduction of new freight lines, like the Dankuni-Surat route, and infrastructure hubs such as the Durgapur East Coast Corridor hub and Varanasi-Siliguri express rail, were particularly noteworthy. These improvements were designed to facilitate smoother and more cost-effective transportation of goods for small businesses. According to industry experts, these infrastructural upgrades are estimated to reduce transport expenses for small business shippers and suppliers by a substantial margin, specifically between 20% and 30%. This would enable businesses to cut operational costs and improve their supply chain efficiency. Such infrastructural developments are seen as essential for fostering growth and enabling MSMEs to compete effectively in the market.
Expert Opinions on Budget
Experts have provided valuable insights into the Union Budget's implications for the MSME sector. HK Guha, president of the Federation of Associations of Cottage and Small Industries (FACSI), lauded the budget's attention to the MSME sector, emphasizing its role in the supply chain and its equity support. He also pointed out the importance of geographical expansion and addressing the receivables issue through mandating CPSUs to use the TREDS platform. Rishabh C Kothari, CEO of CKC Fragrances and ex-president MCCI, acknowledged the budget's support while stressing the importance of effective implementation. He highlighted that success largely relies on successful rollout, particularly in states that require urgent infrastructure and capital investment. Experts' feedback suggests that while the budget introduces positive steps, its long-term impact hinges on effective execution and addressing specific sector challenges.
Support for Corporate Mitras
The Union Budget also outlined plans to support professional institutions in developing a skilled workforce for the MSME sector. The government proposed facilitating institutions like ICAI, ICSI, and ICMAI to design short-term modular courses and practical tools. These courses are designed to develop a cadre of 'Corporate Mitras', particularly in Tier-II and Tier-III cities. The focus on professional development underscores the government's recognition of the need for skilled personnel to support the growth and financial management of MSMEs. The initiative is aimed at equipping these enterprises with the necessary expertise to navigate financial and operational challenges, thus helping them to be more competitive and sustainable. This professional development program seeks to empower businesses to improve their capabilities and facilitate greater expansion.
