WHAT UNION BUDGET 2022 2023 NEEDS NOW
Hassle-free credit, clarity on taxes, higher exemptions
Legislation, tax sops, infra support, policies, duties
MAKE SMALL POWERFUL
A distressed MSME sector hopes for some relief in the Budget
THE ONGOING third wave of Covid-19 has battered the already distressed MSME sector. This sector holds significant value in the Indian economy as its share of gross value added in India’s GDP at current prices for 2019-20 stands at 30 per cent. MSMEs face problems in getting access to credit. “In the upcoming Budget, we suggest hassle-free credit availability to industry, particularly for MSMEs; ease of doing business for the MSMEs; reduced costs of doing business; level playing field for the industry; and timely justice for people and industry,” says Pradeep Multani, Chairman, PHDCCI. On the credit front, V. Padmanand, Partner, Grant Thornton Bharat LLP, says, “There is need for faster clearance of dues to MSMEs. There is also scope to onboard more state government departments and state public sector units into the TReDS (Trade Receivables Discounting System) platform.” According to him, there is also merit in encouraging financial institutions to evolve cluster-based financing instruments to make the financial sector more responsive to the distinct needs of cluster MSMEs in terms of ballooning requirements, etc. Another demand is the extension of the Emergency Credit Line Guarantee Scheme (ECLGS). “We suggest extension in the timeline of ECLGS for another year till March 31, 2023, and extension of the reduced rate of performance security at 3 per cent for one more year till December 31, 2022,” Multani says. To give a fresh impetus to exports from the sector, he suggests export income for MSMEs be made tax-free for three years; he also wants the income of large enterprises from incremental exports (year-on-year) to be made tax free. Will the Union Budget 2022-23 fulfil the hopes of MSMEs? Only time will tell.
—RAJAT MISHRA
FINANCE THE NATION
Need of the hour: a framework for financial services
, the Union Budget has been building a new substructure for the financial services industry. Be it a Bad Bank or return to a development financial institution model, the new institutional framework is aimed at supporting banks and non-banks to push safe consumer lending, focus on less risky project loans, and hand over bad loans to a specialised institution to free up capital. Experts say the Budget will create an enabling environment for these new institutions. “Infra financing needs tax-free
