Budget Promises Accelerated Growth of SME Sector

by CXOtoday News Desk    Jul 14, 2014

sme

The Union Budget, with a focus on growth across industry segments and verticals, has also offered a major impetus for the growth and development of the Indian SME and MSME sector. Applauding Finance Minister, Arun Jaitley’s focus on this segment, T T Ashok, Co-Chairman, CII National MSME Council, felt that the Finance Minister has duly recognized that SMEs form the backbone of the country’s industrial output and employment. “The Finance Minister rightly underscored the importance of promoting entrepreneurship and start-up enterprises,” he said in a statement.

Chandrajit Banerjee, Director General, CII, said that budget lays out medium term vision for the economy and meets industry expectations on growth and employment. He further said that CII is happy to note the encouragement to manufacturing through various measures such as opening defence, insurance, and e-commerce sectors to FDI, correcting Inverted duty structure, setting up of industrial clusters and promoting entrepreneurship.

CII welcomes the proposal to set up a Rs 10,000 crore fund that will act as a catalyst to private capital by way quasi-equity, soft loan, and other risk capital for start-up companies. The decision to revisit the definition of MSME by providing for a higher capital ceiling was most awaited which has been the CII’s recommendation for the last five years.

CII had earlier recommended a program to provide forward and backward linkages with multiple value chains of manufacturing and services sector will also be put in place along with a friendly legal bankruptcy legal framework for SMEs to facilitate easy exit.

Ashok welcomed the proposal of The Finance Minister to set up a trade facilitation centre and a craft centre with a museum with an outlay of Rs 50 crore to develop and promote handloom products which is a welcome step for the development of the Micro Enterprises in India and is going to help them showcase at a global scale. The Finance Minister also announced support for starting six textile mega clusters, in Bareilly, Lucknow, Surat, Bhagalpur, Mysore and Tamil Nadu  allocating Rs 200 crore is a major thrust to the reviving of the MSMEs in the textile sector which is the need of the hour.

Read: Budget 2014: Key Highlights For Indian IT

Allocation of Rs 100 crore to set up the Technology Development Fund to Public and private companies include SMEs to support and develop the Defence sector and cutting-edge technologies is going to help the core MSMEs in accessing global technologies and make them compete at a global scale said Mr Ashok.

Ashok specially welcomed the Programme “Skill India” which is to be launched to skill the youth with an emphasis on employability and Entrepreneur skills will help in nurturing entrepreneurship in India and also help in bridging the current skill gap in the MSME sector in India. Setting up of Committee to examine the financial architecture for MSME Sector, remove bottlenecks and create new rules and structures and give concrete suggestions in three months is a step forward to address financing problem of MSME.

The amendment of the Apprenticeship Act will   encourage MSMEs to avail of the benefits under the scheme and will help in getting skilled manpower for the MSME sector which is currently required. The focus of the budget more on providing infrastructural support like power and land for the MSMEs under various schemes in rural India is going to spur the growth of the sector and create a large number of employments and revive the economy back.

Steps like boost to tourism industry by incorporating concept of e-visas, Funds to stimulate biotech in India emphasizes the importance the Government is showing towards promoting MSMEs in the services sector. The “District level Incubation and Accelerator Programme” to be taken up will provide necessary support for accelerating entrepreneurship at the villages and rural India which is the way forward for a “Ache Din Annewale Hai” for the rural youth in India.