The Government has been paying a lot of attention towards MSME, as the sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades.MSMEs not only play crucial role in providing large employment opportunities but also help in industrialization of rural & backward areas,and hence we are hopeful that our honourableFinance Minister will announce awaited reforms and allocation of resources to help the sector achieve more growth at the grassroot level.
Key expectations from budget 2021 are:
- Ease of unsecured loans processing up to INR 2.00 Cr by Banks for MSMEs and start-ups. Currently tons of documents are needed by banks, even though we are in era of Digital economy. Company PAN number, GST Number, CIBIL ratings, ROC details and online bank transactions should be considered for any business loan processing by banks and it should be made within a day.
- 50% of the previous financial year’s GST paid should be provided as credit in theaccount of the MSME’s and Start-Ups to perform more without looking for funds to be paid towards GST on sales and 50% of the previous financial year’s customs duty paid should be provided as credit in their account for the MSME’s and Start-Ups to import raw materials.This credit should be interest free for a minimum period of 12 months, till the companies come out of pandemic related down turns.
- Automation of TReDS (Trade Receivables Discounting System) to help MSMEs to avail instant credit based on the trade receivables from their banks. Linking of TReDS with GSTN will further authenticate the genuineness of Trade Receivables.
- Micro and Small Enterprise Facilitation Councils (MSEFC) should be provided with sufficient powers to help MSMEs in recovering their payments from their debtors. Amount due should be automatically debited from debtor and should be credited to MSMEs who complained about delayed payments. This process hasto be automated and should be done without physical meetings.
- Smart City Projects implementations should be expedited to boost the economy and all various pending projects should be cleared immediately.