Union Budget 2022-2023: Announcements for MSME Sector
Finance Minister Nirmala Sithraman presented the Union Budget 2022 on February 1, 2022. The primary focus was on the MSME sector, with several key issues being discussed. Union Budget 2022-23 has presented a comprehensive package of policy announcements to support the recovery of MSMEs. One of the important announcements is the extension of the ECLGS scheme, and the revamp of the CGTMSE program. The present article highlights the Announcements for MSMEs in Union Budget 2022-2023.
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Key Announcements for MSMEs in Budget 2022-2023
The Union Budget 2022-23 highlights the MSME sector, a critical sector that makes up for about 45% of the country’s total manufacturing output, 40% of exports, and almost 30% of the national Gross domestic product (GDP). With a focus on growth, the government announced the following welcome measures to boost the MSME economy in India.
- Delivering the Union Budget 2022-23, Finance Minister announced the extension of ECLGS up to March 2023.
- Credit guarantee trust for small micro-enterprises scheme (CGTMSE) will be revamped with the required infusion of funds.
- Udyam and three other portals to be interlinked to formalize the economy
- The Raising and Accelerating MSME Performance (RAMP) program will be rolled out to help MSME
- Customs duty exemption on importing steel scraps is being extended by a year to help the MSME sector.
Extension of ECLGS
To focus on the hospitality sector, the Finance Minister announced the extension of ECLGS up to March 2023.
The Emergency Credit Line Guarantee Scheme (ECLGS) was launched amid the Covid-19 pandemic to help MSMEs cope with pandemic losses and was extended up to March 31, 2022.
Considering the following aspects, the ECLGS will be extended up to March 2023, and its guarantee cover will be expanded by Rs 50,000 crore to a total surface of Rs 5 lakh crore.
- ECLGs have provided the much-needed additional support to more than 130 lakh MSMEs helping them mitigate the worst effects of a pandemic.
- The hospitality and related services, especially for MSMEs, are yet to regain their pre-pandemic level.
CGTMSE for MSEs to be Revamped
CGTMSE for MSEs to be revamped; it’s another essential announcement for MSME Sector during the Union Budget 2022-2023.
Credit guarantee trust for small micro-enterprises scheme (CGTMSE) will be revamped with a required infusion of funds. It dramatically supports MSMEs, facilitating additional credit of Rs 2 lakh crore for MSEs and expanding employment opportunities.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which was jointly set up by the MSME Ministry and SIDBI in 2000 to catalyze the flow of institutional credit to micro and small enterprises (MSEs)
There is always a demand for collateral-free loans by MSMEs and Startups. An additional Rs 2 lakh crore under CGTMSE will increase the number of entrepreneurs and create more job opportunities.
Raising and Accelerating MSME Performance (RAMP) program for MSME
To help the micro, small and medium enterprises (MSME) sector become more resilient, competitive, and efficient, Finance Ministry announced the Raising and Accelerating MSME Performance (RAMP) program will be rolled out with an Rs.6000 crore outlay spread over five years.
Udyam and three other portals to be interlinked
To prioritize entrepreneurship and formalize the economy, the MSME registration portal Udyam, e-Shram, NCS, and ASEEM portal will be interlinked to provide live and organic databases in the Union budget 2023.
- The scope of all the portals collectively will be widened, offering G2C, B2B, and B2C services, said the Finance Minister.
- This step aims to create credit facilitation, skulking, recruitment efficiency, and employment opportunities.
Get in touch with IndiaFilings to get MSME – Udyam Registration
Additional allocation for solar PLI scheme announced
Finance minister Nirmala Sitharaman in the Union Budget, has announced a further distribution towards the solar production-linked incentive (PLI) scheme.
Additional allocation of Rs 19,500 crore for PLI for mfg of high-efficiency modules with a priority to fully integrate manufacturing units from polysilicon to solar PV modules will be made.
Production Linked Scheme (PLI) scheme applied in 14 sectors has received an excellent response and has the potential to create 60 lakh new jobs and additional production of 30 lakh crore during the next five years.
Railways to develop new products & logistic services for MSMEs, small farmers
Besides introducing a unified logistics interface platform for the logistics sector, FM added that railways would develop new products and efficient logistics services for small farmers and small and medium enterprises.
Support to Startups
A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD. This is to finance startups for agriculture & rural enterprise, relevant for the farm produce value chain. The activities for these startups will include, among other things, support for FPOs, machinery for farmers on a rental basis at the farm level, and technology, including IT-based support.
Scheme for design-led manufacturing to build a 5G exosystem
Project for design-led manufacturing to be launched for 5G ecosystem as part of PLI scheme to enable affordable broadband and mobile.
Extension of the last date for production under section 115BAB
The government introduced a concessional tax regime of 15 percent for newly incorporated domestic manufacturing companies. The later date for commencement of manufacturing or production under section 115BAB has been extended by one year (March 31h 31, 2023, March 31h 31, 2024).