[Budget 2022] ECLGS extended up to March 2023 for MSMEs, guarantee cover increased to Rs 5 lakh crore: FM

The FM also highlighted that the PLI scheme has received an excellent response and has the potential to create 60 lakh new jobs and additional production of 30 lakh crore during next five years.
1 CLAP
0

Finance Minister Nirmala Sitharaman announced various measures for the Indian micro, small and medium enterprises (MSMEs) as part of Union Budget 2022. This is the fourth budget presented under the Modi 2.0 government.

In the announcement, the FM highlighted that the Emergency Credit Line Guarantee Scheme (ECLGS) has been extended to March 31, 2023.

She said, "The hospitality and related services, especially by micro and small enterprises, are yet to regain the pre-pandemic level of business. Considering these aspects, the ECLGS will be extended up to March 2023." 

In addition, she also announced that the guarantee cover of this scheme will be expanded by Rs 50,000 crore to Rs 5 lakh crore. This additional amount is being "earmarked especially for the hospitality and related sectors."

Sitharaman said that MSME portals such as Udyam, e-shram, NCS and Aseem will be inter-linked, and their scope will be widened. They will now perform as portals with live organic databases providing G-C, B-C and B-B services such as credit facilitation, enhancing entrepreneurial opportunities.

According to India Brand Equity Foundation (IBEF), India is home to about 6.3 crore micro, small and medium enterprises (MSMEs). This sector is one of the largest employment generators in the country, second only to agriculture.

Budget 2022 Live updates

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has also been revamped with credit of Rs 2 lakh crore for micro and small enterprises.

The FM also announced that in order to accelerate MSME performance, programmes will be rolled out in the next five years with an outlay of Rs 6,000 crore. "This will help MSME sector become more resilient, competitive and efficient. Skilling programmes and partnerships with the industry will be oriented to promote continuous skilling avenues, sustainability, and employability. The national skill qualification framework will be aligned with dynamic industry needs."

Besides introducing a unified logistics interface platform for the logistics sector, Sitharaman added that railways will develop new products and efficient logistics services for small farmers and small and medium enterprises.

"One station, one product concept will be popularised to help local businesses and supply chains," she explained.

Other announcements-

  • Production Linked Scheme (PLI) scheme applied in 14 sectors has received an excellent response and has the potential to create 60 lakh new jobs and additional production of 30 lakh crore during next five years.
  • Rs 19,500 crore allocation for PLI for manufacturing of high efficient solar PV modules.
  • he GST collection broke all records reaching Rs 1.4 lakh crore in January 2022 which is the highest amount reported since its inception. "This has been possible due to the rapid economic growth recovery post COVID as well as various policy and administration taken undertaken by central and state tax administrations."
  • Scheme for design led manufacturing to be launched for 5G ecosystem as part of PLI scheme to enable affordable broadband and mobile.
  • 68 percent of capital procurement budget in defence to be earmarked for domestic industry in 2022-23.
  • Rs 90,500 crore marked for PLI for manufacturing of high efficiency module for polysilicon.
  • A concessional tax regime of 15 percent tax was introduced by the government for newly incorporated domestic manufacturing companies. The last date for commencement of manufacturing or production under section 115BAB has been extended by one year (from March 31, 2023 to March 31, 2024).
Edited by Anju Narayanan

Latest

Updates from around the world