Image Courtesy: The Economic Times
The budget 2019 that got declared recently has comprehensively centered around three key components — real estate, farmers and the urban middle class. In the budgets of the last two years, the aim to drive the rural demand was evident. For a sector that has been pounded by demonetization and the disordered execution of the GST, Finance Minister Piyush Goyal had next to nothing in the interim budget 2019 declaration to provide some relief to the MSME sector.
From endorsing loans up to Rs. 1 crores in a span of 59 minutes to furnishing a 2% rebate on interest for fresh loan credit of Rs. 1 crore to the SME units registered with GST, Goyal’s declaration just emphasized what our PM Narendra Modi reported on November 3, 2018. Naming it as a ‘Diwali bonus” for the segment, Modi had spread out pillars to assist MSMEs, which included access to market and credit, innovation up-gradation and simplicity of doing the business.
Modi had reported the launching of this 59 minute loan to empower simple access to credit for MSMEs. The Prime Minister had likewise declared that the loan alternative for GST enlisted firms will currently be accessible through the GST portal itself. Goyal, however has not yet disclosed where the latest numbers stand.
The segment would be frustrated that there was nothing done to facilitate the credit troubles. As per the Economic Survey 2017-18, credit disbursement data given by banks demonstrates that out of an absolute remarkable credit of Rs 26,041 billion; 82.6% of the sum was given as loan to large enterprises while the MSMEs got just 17.4 %. The ongoing strife in the NBFC sector has added to the strain on this sector. This budget thus had a laid back approach towards this sector and didn’t pay any heed to the much visible stress on this sector.
This interim budget isn’t intended to have any enormous declaration in it, yet for a sector that is confronting impressive headwind, it would be a botched chance. Concentration on the upliftment of the rural society to give an aberrant push to the MSME sector and expanding the target for loaning under MUDRA Yojana would have gone a mile in giving some kind of help to this overlooked sector.