Micro, Small & Medium Enterprises (MSMEs) are the lifeblood of the Indian economy, contributing a whopping 29.15% of its GDP as of 2021-22. Yet, these vital players often struggle to reach their full potential due to limited access to credit and funding.
As the upcoming Budget 2024 approaches, the MSME sector holds its breath, hoping for policies that will finally unlock their true potential and drive economic growth.
Industry experts emphasize the critical role of institutional credit for the MSME sector's optimal performance. In the upcoming interim budget, hopes are pinned on incentivized lending rates, credit guarantee schemes, and expanded funding channels to fortify the financial resilience of MSMEs.
Rohit Arora, CEO and Co-founder of Biz2X and Biz2Credit, anticipates a budget prioritizing financial inclusion and ease of doing business. Simplified regulatory procedures and reduced compliance burdens are seen as crucial measures to empower startups and MSMEs, fostering a more agile and competitive landscape.
Aligned with the digital era, experts stress the importance of budgetary investments in digital infrastructure, cybersecurity, and skill development for sustainable growth in startups and MSMEs. A comprehensive budget addressing these aspects is expected to strengthen financial foundations and propel these sectors into more significant roles in economic recovery and job creation.
Anil Bhardwaj, Secretary General of FISME, highlights challenges in the banking sector, citing a lack of competition and weak regulatory institutions. The need for customer-centric approaches, especially in public sector banks, is emphasized to enhance the MSME banking experience.
Consultancy firm Deloitte points out that MSMEs in crucial sectors like automotive, electronics, industrial machinery, and chemicals require risk reduction in capital flows. This is seen as imperative for unlocking the sector's potential in areas such as semiconductors, space technology, defense, and medical equipment.
From the perspective of the IT and Tech industry, Devroop Dhar, Co-Founder & Managing Director of Primus Partners, emphasizes the Union budget as an opportunity to expedite government expenditures on digital public goods. Sectors like healthcare, education, agriculture, and MSMEs are particularly highlighted for focused investments.
The need for improved access to credit and a supportive ecosystem is particularly acute in sectors like:
Budget 2024 presents a golden opportunity to empower MSMEs and unlock their immense potential. By prioritizing financial inclusion, investing in digital infrastructure and skills, and addressing existing bottlenecks, the government can pave the way for a vibrant and competitive MSME sector, driving economic growth, job creation, and innovation across the nation.