NEW DELHI: MSMEs
Finance Minister Nirmala Sitharaman proposed measures such as raising the turnover threshold for audit of accounts from Rs 1 crore to Rs 5 crore to improving the health of Micro, Small and Medium Enterprises. These measures along with other steps proposed by the government were welcomed by industry players and experts. “Thrust on MSMEs through credit availability, compliance burden reduction, etc. will continue to augment entrepreneurship, thus also directly impacting job creation,” said Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG.
To facilitate easy financing, the FM said a scheme would be introduced to provide subordinate debt to MSMEs and an app-based invoice financing loans product will be launched. She also proposed a National Logistics Policy to create a single window e-logistics market to make MSMEs more competitive. In total, the MSME ministry’s allocation stood at Rs 7,011 cr — a 71 per cent rise over and above the last year’s budgetary allocation.
“The proposal to offer subordinated debt (quasi-equity) to MSME by banks which in turn will be gurateed by CGTMSE is positive for MSMEs,” said Karthik Srinivasan, SVP & Group Head, Financial Sector Ratings, ICRA, Deepak Jain, president of auto component body ACMA, said measures to extend invoice financing to MSMEs and creating access to working capital through a new scheme are a welcome step.