The budget for the fiscal year 2023–24 will be presented by the Union Finance Minister Nirmala Sitharaman on February 1, 2023. Individuals and corporate leaders are anticipating it, hoping that the budget reforms will countermeasure the slowly recovering economic situation post-Covid-19 pandemic with increasing pressure due to inflation and fear of recession globally. According to the Centre for Monitoring Indian Economy (CMIE) India’s unemployment rate has risen to 8.30%. India’s aspirations of becoming a developed nation will require adequate investment in women’s empowerment as they are important for India’s rapid growth. Incidentally, only 18% of India’s GDP is by women – a large untapped potential that has not been realized. Against this backdrop, job creation and assuring sustainable employment will have to be focal points for the government.
Micro, Small, and Medium-sized Enterprises (MSMEs) are considered the backbone of the Indian economy. Over 60 million entities come under the MSME category, adding up to 33% of India’s GDP by creating 120 million jobs across all industries, including rural areas. In the previous budget, the Finance Minister had announced a series of reforms for the MSME sector. The government’s decision to refurbish the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and include the Emergency Credit Line Guarantee Scheme (ECLGS) until March 2023 has helped many small businesses. However, the sector is dealing with critical issues; the Union Budget 2023 will have to address these and promote job growth in a gender-agnostic approach considering women are only 20.4% of Indian MSMEs.
Listed below are the pertinent aspects of MSMEs which need to be addressed:
- Updation in the MSME Act 2006 provisions
- Provide subsidies to raw materials and associated cost
- Revisions on women’s entrepreneurship policies – Mudra Scheme, Stand Up India, and other credit guarantee schemes
- Channels to create awareness of policies and schemes under MSMEs
- Streamlining the application and credit policy process
- Removing the interest rate cap on borrowings
- Can reduce tariffs and duties both on imports and exports
- Encourage start-up initiatives
- Implementation of tax breaks
- Scheme for more investments in infrastructure development and digitization
With the introduction of the measures and schemes for the MSMEs ensuring more women participation in the Union Budget 2023, this sector can play a pivotal role in accelerating the country’s vision to become a 5- trillion-dollar economy in the next five years and aspire to become a 10- trillion-dollar economy by 2030.
