Budget 2023-24 addresses the financial constraints of the MSME sector
Several policies have also been implemented for the development of this sector.
Budget 2023-24 has also allocated funds for some very important aspects of the MSME sector. These include special allocations for credit guarantee for the MSME sector, enabling more small and micro units for presumptive taxation, solving timely payment issues and for release of funds that were fortified in the government accounts during Covid 19 period crisis.
Status Quo of the MSME
The Budget announcements for the MSME sector is important for the Indian economy as this sector contributes around 30% of the national GDP and employs 11 crore people, exports 40% of the total export.
However, the sector faces several problems as well, the most serious of them being highly inadequate cheap credit. About 60% of the credit the sector takes is from the informal sector which is both costly and not guaranteed. Most of the MSME units cannot access modern technology and efficient manpower and hence are unable to reap the benefits of productivity. The size of most of these units are small and hence they cannot reap scale advantage.
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