FM opens fund taps for MSMEs
Continuing the pandemic support to micro, small and medium enterprises (MSMEs), the Emergency Credit Line Guarantee Scheme, introduced as part of the governments Covid relief package in 2020, will be extended for one year and the scope of the guarantee cover will be increased to Rs 5 lakh crore. A revamped Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme too will facilitate additional credit of Rs 2 lakh crore to MSMEs. In the case of start-ups, the tax incentives will be extended to one more year.
According to the government, ECLGS has provided credit to more than 130 lakh MSMEs to mitigate the adverse impact of the pandemic.
However, the MSMEs in the hospitality and related services are yet to regain their pre-pandemic level of business. Hence, the Budget has extended ECLGS up to March 2023 and raised its guarantee cover by Rs 50,000 crore to
Rs 5 lakh crore.
The CGTMSE scheme will be revamped to facilitate additional credit of Rs 2 lakh crore for MSMEs and expand employment opportunities. Further, the Raising and Accelerating MSME Performance (RAMP) programme with an outlay of Rs 6,000 crore over five years will be rolled out to make the sector more resilient and competitive.
Further, Udyam, eShram, NCS and ASEEM portals will be interlinked with live, organic databases, providing G2C, B2C and B2B services.
The Budget also extended customs duty exemption given to steel scrap last year for another year to provide relief to MSME secondary steel producers.
In the case of start-ups, the Budget proposed to extend the 10-year tax incentive to startups founded till March 31, 2023 also. This incentive was available for those incorporated till March 2022 earlier.
For agri startups, a fund with blended capital, raised under the co-investment model, will be facilitated through Nabard. This will fund activities for startups providing support for farmer producer organisations (FPOs), machinery for farmers on rental, and technology.
In the defence sector, 25 per cent of the research & develoment budget will be opened up for industry, startups and academia. Startups will be promoted to facilitate 'Drone Shakti' through varied applications and for Drone-As-AService (DrAAS) and required courses for skilling will be started in select ITIs.