Boosting India's MSMEs: Key Initiatives and Budget 2024 Insights
Image: Micro, Small, Medium, Enterprises (MSME)
Image courtesy: Red Fort Capital
The 2024 budget has introduced a series of initiatives to support Micro, Small, and Medium Enterprises (MSMEs).
While the overall budget allocation remains the same as last year, the government has proposed significant measures in financing, regulatory changes, and technology support to enhance the growth and sustainability of MSMEs.
Introduction
Finance Minister Nirmala Sitharaman presented the 2024 budget, focusing on strengthening the MSME sector.
Despite maintaining the budget allocation at Rs 22,137.95 crore, the new initiatives aim to provide comprehensive support through financing, regulatory changes, and technology enhancements.
Key Initiatives
1.Financing Support for MSMEs:
Public sector banks will develop in-house capabilities to assess MSMEs for credit, reducing reliance on external assessments.
A mechanism will be established to ensure the continuation of bank credit to MSMEs during periods of financial stress.
The limit of Mudra loans under the “Tarun” category will be increased from Rs 10 lakh to Rs 20 lakh for entrepreneurs who have previously availed and repaid loans.
The Emergency Credit Line Guarantee Scheme (ECLGS) allocation has been increased to Rs 6 lakh crore from Rs 5.25 lakh crore.
2.Regulatory Changes
The budget proposes several regulatory changes to streamline processes and reduce bureaucratic hurdles for MSMEs.
These changes aim to create a more conducive environment for MSMEs to thrive and expand their operations.
3.Technology Support
The government will provide technological support to MSMEs to enhance their productivity and competitiveness.
This includes support for technology upgradation and access to advanced tools and resources.
Detailed Analysis of Central Schemes
Image: Micro, Small, Medium, Enterprises (MSME)
Image courtesy: MSME
1.Scheme for Fund for Regeneration of Traditional Industries (SFURTI):
Allocation: Rs 260 crore (7.14% decrease from last year)
Objective: To make traditional industries more productive and competitive by organizing them into clusters and providing long-term sustainability support.
2. Khadi Gramodyog Vikas Yojana:
Allocation: Rs 1,037.19 crore (13% increase from last year)
Focus: Promoting khadi and village industries.
3.Scheme for Promotion of Innovation, Rural Industry, and Entrepreneurship (ASPIRE):
Allocation: Rs 20 crore (lower than last year's Rs 22.23 crore)
Goal: To promote startups and entrepreneurship in the agro-industry sector.
4.MSME Champions Scheme:
Allocation: Rs 54.72 crore (increase from Rs 52.72 crore)
Aim: To modernize clusters and enterprises, reduce wastages, and enhance business competitiveness.
5.Prime Minister Employment Generation Programme (PMEGP):
Allocation: Rs 2,300 crore (14.81% decrease from last year)
Purpose: A credit-linked subsidy scheme to generate employment in non-farm sectors in rural and urban areas.
6.Credit Support Programme:
Allocation: Rs 0.04 crore (significant reduction from Rs 500.08 crore)
Indication: The government may phase out this scheme.