Uday Kumar Verma, Secretary, Ministry of MSME says Budget 2011 has addressed several SME sector concerns. He would, however, like to see the sector get more competitive
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| Uday Kumar Verma |
What are the various schemes/subsidies/outlays that the FM has allocated for the small industries sector for 2011-2012? Had SIDBI/MSME given their own requests/views on expectations for your sector to FM? What were they?
Access to timely and adequate credit is one of the biggest concerns for this sector, especially for the small borrowers. The Budget proposes to create “India Microfinance Equity Fund” of Rs. 100 crore with SIDBI. Also, to empower women and promote their Self Help Groups (SHGs), it has been proposed to create a “Women’s SHG’s Development Fund” with a corpus of Rs.500 crore. Further, last year, SIDBI was given Rs.4,000 crore for refinancing incremental lending by banks to these enterprises. For 2011-12, the figure has been upped to Rs. 5,000 crore, sourced from the shortfall of banks on priority sector lending targets. A new simplified return form ‘Sugam’ is to be introduced to reduce the compliance burden of small taxpayers who fall within the scope of presumptive taxation. The Ministry of MSME had also sent pre-budget proposals to the Ministry of Finance, covering proposals relating to technology, innovation, finance and other
taxation matters.
What impact is the Budget likely to have on the small industries? Which particular industries will gain from this? Are the others likely to face some adverse impact?
As mentioned in the budget, SIDBI will get Rs.5000 crore for re-financing incremental lending by banks to this sector. Further, the India Micro Finance Equity Fund of Rs.100 crore is likely to address a long standing need of this sector. The Committee set up by RBI to look into issues relating to Micro-finance sector has submitted its report. As mentioned in the budget, the government is considering putting in place an appropriate framework to protect the interest of small borrowers. This will benefit entrepreneurs
across industries.
What expectations did the sector/other industry representatives have from the budget? How many of those expectations have been fulfilled?
The Ministry of MSME’s pre-Budget proposals for 2011-12 were in line with the recommendations of the Task Force on MSMEs and based on the feedback received from the MSME associations across the nation. The Budget has introduced a few new initiatives which will go a long way in addressing the long standing needs of this sector.
What specific schemes, subsidies etc. which you think are crucial for small industry segment, would you like to request FM to include post-budget for the small industries?
Keeping in view the need to encourage innovation by MSMEs, an MSME innovation fund of Rs.500 crore needs to be set up and made functional. Also for infusing latest technology at reasonable costs, a Technology Acquisition and Upgradation Fund for MSMEs may be created.
Will this budget take our MSME sector to the heights we dream of?
The Budget has introduced a few new initiatives particularly to meet the credit needs of the sector. However, we need to continue the thrust on making the sector competitive, by encouraging innovations & latest technology.
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