Expectations high among MSME stakeholders from Union Budget

MADURAI: The ensuing Union Budget 2023-2024 has raised high expectations among stakeholders relying on the MSME sector. This sector has endured continuous hardship and it certainly requires a lot more for survival, N Jegatheesan, president, Tamil Nadu Chamber of Commerce and Industry, Madurai, said on Sunday.

Micro, Small and Medium sized Enterprises (MSMEs) are regarded as the backbone of the Indian economy. With the presence of over 63 million MSMEs employing over 110 million people staggered across in services and in manufacturing contributes nearly 30 per cent to the GDP, 45 per cent of employment and nearly 50 per cent of the country’s total exports. MSME sector is providing services that improve and add value to people’s lives across the country, especially in rural areas.

Further, he said access to finance has always been an issue for MSMEs and it’s a major hindrance to the growth of the sector. The other major challenges faced by this sector were lack of technical skills, infrastructure, low budgeted research and development, insufficient use of information technology, ineffective marketing strategies and identifying target audience for marketing, the Chamber president pointed out.

Moreover, several regulatory issues such as filing of so many returns in tax compliance, pollution and labour laws have resulted in high cost on low capital and ended up making this sector more uncompetitive among others.

MSMEs require schemes like the Emergency Credit Line Guarantee Services (ECLGS) to tide over the challenging times. “The MSME sector expects to reduce interest for late payment of GST from 18 per cent to 12 per cent and also hope for a reduction in the income tax rates for partnership firms, LLPs (Limited Liability Partnership) and proprietor concern to the maximum of 25 per cent which comprise the majority of MSMEs,” he said.

The Production Linked Incentive (PLI) scheme should also be extended to the manufacturing sector of MSMEs to boost exports. To encourage the MSME sector and to improve its productivity and quality, he said the Union government should take necessary remedial measures, announcing more incentives and benefits and by introducing various new policies aimed at providing industrial land at reduced cost, utility subsidies and also to ensure easy access to finance.