Budget 2024: FM Sitharaman outlines timely funds, tech, training for MSMEs; sector reacts

Budget highlights: Finance Minister Nirmala Sitharaman on February 1 said that Micro, Small and Medium Enterprises (MSME) are an “important policy priority” for the government looking at their global significance. However, the finance minister didn't make any new announcements on credit access, technology adoption or GST for small businesses. 

Speaking about the development during the Amrit Kaal, Sitharaman noted, “It is an important policy priority for our government to ensure timely and adequate finances, relevant technologies and appropriate training for the Micro, Small and Medium Enterprises (MSME) to grow and also compete globally.” 

She further added that the government would take up next-generation reforms to facilitate growth and the next five years will be of unprecedented development and golden moments to realise the dream of developed India by 2047.

Reacting to the announcement, the MSME sector collectively welcomed the steps and noted that the increased threshold for presumptive taxation is a great step ahead. 

"The government’s focus on empowering the MSME sector is evident. The commitment to providing timely and adequate finances, relevant technologies, and training is welcomed. The emphasis on orienting the regulatory environment to facilitate MSME growth indicates a supportive policy framework. The increased threshold for presumptive taxation from Rs 2 crore to Rs 3 crore is seen as a positive step, providing relief to small retail businesses, allowing them to focus on growth and development. Mr. Mandeep anticipates that these measures will enhance the competitiveness of MSMEs on a global scale. In alignment with the 'Panchamrit' goals, the founder notes the government's focus on sustaining high and resource-efficient economic growth. The commitment to energy security is perceived as a positive step, ensuring availability, accessibility, and affordability for businesses. To meet investment needs, the founder appreciates the government's commitment to preparing the financial sector in terms of size, capacity, skills, and regulatory framework. This will contribute to a robust financial ecosystem that can support the growth aspirations of both MSMEs and retail businesses," said Mandeep Arora, MD & Co-founder, UBON.

“Recognition of the role of MSME, need to compete globally in a green economy and need for policy environment that considers the need of MSME is important. India cannot generate the jobs it needs and compete globally without making its MSMEs competitive,” said Nilaya Varma, Co-Founder & CEO, Primus Partners.

"The introduction of policies and schemes aimed at supporting MSMEs, promoting deep tech in defense, and facilitating affordable housing for the middle class are poised to stimulate economic activity across various sectors. These initiatives can lead to increased demand for goods and services, encourage entrepreneurship, and attract investments, contributing to overall economic growth," said Sonam Srivastava, Founder and Fund Manager at Wright Research, PMS.

"The government's commitment to timely finances, relevant technologies, and appropriate training for MSMEs signals a strategic alignment with sectoral growth and global competitiveness. The nuanced adjustment of the regulatory environment to facilitate MSME expansion emerges as a pivotal element in the comprehensive policy mix. Moreover, the noteworthy success of the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana is exemplified by its support to 2.4 lakh Self-Help Groups (SHGs) and the provision of credit linkages to sixty thousand individuals. This initiative signifies a significant leap towards fortifying the financial foundations of small enterprises, a testament to the effectiveness of policies aimed at uplifting the MSME sector.
The confluence of technology and strategic policy initiatives outlined in the interim budget reflects a concerted effort to bolster economic growth, empower MSMEs, and position India as a global economic contender," said Arun Poojari, Co-founder and CEO of Cashinvoice, digital Supply chain finance platform.

"There is a missed opportunity in enabling the growth of MSMEs as part of the Indian ecosystem. Acknowledging MSMEs as a cornerstone of our economy is crucial for sustainable global competitiveness. Without enhancing the competitiveness of our MSMEs, India cannot generate the requisite jobs and effectively compete on the global stage. A prime illustration of the potential impact lies in the announcement of long-term interest-free loans for R&D in sunrise sectors. This implicitly recognizes that strategic debt can act as a catalyst for innovation and research, positioning the younger generation of India to excel in emerging industries," said Ketan Mehta, CFO at CredAble.

Also read: Budget 2024 LIVE Updates: No change in taxation but here is what the FM said

Also read: Budget 2024: FM Sitharaman presents 10 top achievements of Modi government in last 10 years