By Sanjay Agarwal
The finance minister has managed the tough balancing act of spurring economic revival while also maintaining fiscal discipline. How the Budget platform was used for setting a roadmap for the next 25 years is indeed commendable, with something for everyone and a special focus on new-age industries like start-ups, infrastructure, blended fuel, electrical vehicles, digital currencies, blockchain technologies and renewable energy. Crucially, while the Budget had a clear digital focus, it did not leave the needs of the grassroots unattended.
MSMEs, the growth engine of Atmanirbhar Bharat, are gearing up for a more digital savvy year ahead with interlinked portals like Udyam, e-Shram, NCS and ASEEM, which will deepen their integration with the organised ecosystem. This will help credit facilitation, enhance ease of doing business, and provide impetus to the entrepreneurial spirit in the country.
Continuing its efforts to support the growth of the pandemic-impacted MSME sector, the Union government has increased the corpus of Emergency Credit Line Guarantee Scheme (ECLGS) by 50,000 crore, taking the total corpus to5 lakh crore, extended the validity of the scheme to March 2023 and added sectors like hospitality among the beneficiaries. First introduced in May 2020, ECLGS has been among the key schemes of the government helping MSMEs regain their lost glimmer post-pandemic.
The other two notable announcements by the finance minister were infusion of additional funds to revamp the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme and the government’s plan to roll out the Raising and Accelerating MSME Performance (RAMP) programme in the next five years with an outlay of `6,000 crore. Both these schemes will help smaller enterprises get access to capital much faster with potential to expand employment opportunities while also boosting up the start-up culture. The announcement to issue digital currency based on blockchain technology will also give a huge boost to the start-up ecosystem.
Construction of 25,000 km of rural roads, setting up of four Multimodal Logistics Parks and awarding of eight ropeway projects in the coming financial year, along with development and manufacturing of 400 new-generation Vande Bharat trains and development of 100 PM GatiShakti cargo terminals, in the medium term, will have a trickle-down effect on the entire supply chain and allied industries including smaller contractors, manufactures and MSMEs.
Similarly, the government’s announcement to allocate `48,000 crore towards affordable housing will also benefit MSMEs engaged in real estate-related industries. By some estimates, the real estate sector in India has around 125 allied industries dependent on it.
The MSME sector has been gradually recovering from the impact of the pandemic and needs continued hand-holding and policy support to take advantage of the opportunities provided by the evolving global supply chain dynamics. The policies announced in the Budget have meaningfully addressed these needs with emphasis on making access to capital simpler and seamless. While the initiatives are now well in place, the effective implementation is key.
(The author is MD and CEO, AU Small Finance Bank. Views are personal.)