The rationalization of GST
The rationalization of GST will also do a world of good to the sector. Initiatives such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) that facilitates funding without collateral security or third party guarantee and Interest Subvention for all GST registered MSMEs are gradually fueling the growth. Still, there’s a lot more that needs to be done. The government should also consider giving some relaxation on GST, especially in the manufacturing sector, and even dole out some incentives for filing GST returns on time. GST refunds are also proving to be bottlenecks, and faster processing of GST refunds would be a great relief.
- Empowerment of emerging Micro-entrepreneurs
According to FISME (Federation of Indian Micro and Small & Medium Enterprises), majority of the small businesses are facing challenges of remaining small due to lack of capital and are unable to produce matching collateral securities as they grow, in the ratio of the increasing funds they need. Lack of access to skilled labor, capital, power supplies, and infrastructure has rendered many micro-enterprises immobile. For them to grow, Budget 2020 could introduce policies or allocate funds for these micro-entrepreneurs.
Other Expectations from MSME Budget 2020:
- MSMEs contribute close to 50 per cent to India’s exports, and thus, there is a demand that a minimum of 50% of market development funds be earmarked for this sector to boost exports.
- When statistics show that the unemployment rate is at a 45-year high, it’s only prudent for the budget to give a shot in the arm to the sector that has the potential of creating millions of jobs.
- MSME sector wants serious action on the MSME schemes and better access to credit, compared to the last financial year.
- Increase in the government partnerships for the public sector startups which are struggling.
- Small and medium-sized businesses expect the government to primarily focus on cost-control, reforms, non-GST sources of revenue, tax-efficiency, and selling off unprofitable Public sector undertakings.
There is a sense of pessimism in the small and medium business owners and the government needs to reach out and encourage them with a budget that promotes ease of business. The MSME sector will watch with bated breath if the Union Budget will address its woes and introduce some healing touch.