HomeBudget 2022Budget 2021: Reactions from the MSME Sector

Budget 2021: Reactions from the MSME Sector



In a bid to boost the pandemic hit economy, through the multiple investment announcement in the sectors like Health, Infrastructure, Education, Startups, Automobile among others. Finance Minister Nirmala Sitharaman on Monday tabled the first paperless Union Budget for 2021-22 in the parliament.

Here are some reactions of experts from the MSME sector:

- Advertisement -

Shachindra Nath, Executive Chairman & Managing Director, U GRO Capital:

“Broadly evaluating, the Union Budget 2021 is a significant attempt by the government, to accept a higher fiscal deficit and enhance expenditure towards economic revival. It is appreciative of the government to put a special emphasis on providing relief to the taxpayers and reducing the burden posed by COVID-19. One of the key highlights of the budget is the setting-up of the development finance institution (DFI) towards infrastructure financing and institutional framework to purchase a corporate bond, which would solve the issue of liquidity for the infrastructure sector and corporate bond market. Also, with the path-breaking initiative of instituting Asset Reconstruction Company (ARC) and asset management company (AMC) for NPA consolidation, banks have been allowed to streamline their focus on the much-needed growth.

The government has reduced the threshold for NBFCs to initiate recovery under the SARFAESI Act, 2002. This is an effective step towards ushering credit discipline and in the long-term will increase the penetration of credit to small businesses. The government has also doubled its allocation towards MSMEs, which would greatly support their revival and eventual growth. Holistically, the Union Budget 2021 is an encouraging event, yet we optimistically look forward to distinctive support for NBFCs, with a framework to provide them sufficient liquidity, while also furthering the credit guarantee scheme support to the MSMEs.”

Mr. Samir Bhatia, Founder & CEO, SMEcorner:

- Advertisement -

“The Hon. Finance Minister has presented a budget which will provide tremendous stimulus to the economy, and in particular, the MSME segment. An increase in import duties for certain products and rationalization of duties in the case of many items manufactured by MSMEs will help the local industry compete against imports and boost their revenues.  Besides, other changes such as increasing the limit for tax audit to 10crs of annual turnover for ‘digital’ MSMEs is a very welcome step.  Overall, the budget will provide a major impetus to all sectors of the economy which was much needed.  I give 100/100 to this budget!”

Mr. Shubhradeep Nandi, CEO & Co-Founder, PiChain Labs:

- Advertisement -

“Doubling of allocation for MSME will hopefully be a great boost towards new employment generation post the very challenging covid period that had seen poor demand & job cuts.”

Mr. Arjun Ranga, Managing Director, Cycle Pure Agarbathi:

“The doubling of MSME allocation to Rs 15,700 crore is a well-planned strategy to boost the sector and bring it to pre-covid levels. This budget will also strengthen our local handicraft market and support the artisans in this sector. The improved credit access for enterprises will also uplift the industry and generate employment in the country.”

Mr. Sanjeev Singhai, Founder of WellnessTA & National VP of MSME and Start-up forum – Bharat: 

“Kudos to our bold Prime Minister, under whose leadership the Hon’ble Finance Minister continues to steer the Indian Economy through difficult times of the pandemic. The stamp of commitment to make India a $5 trillion economy is very evident in this budget as the FM continues with her economic reforms. New announcements to support MSMEs and Startups with policies and reliefs are welcome steps.

The announcement of Rs. 10,000 cr fund to support private equity and Rs. 5,000 cr VC Funds for distressed MSME assets along with Rs. 15,700 cr provisions MSME sector showcases Government commitment to support these two sectors. Extension of tax holidays for a year and capital gain exemptions are a welcome step. This will significantly help MSMEs and Startups to regain the lost grounds due to pandemic, step up manufacturing, exports and to create more employment in the country.” 

Samir Sathe, Executive Vice President, Wadhwani Advantage at Wadhwani Foundation:

“The current budget has a thrust on globalizing supply chains in manufacturing and increased investment in hard infrastructure, which together is a welcome step for SMEs, albeit indirectly and with a lag since the SMEs will need to experience on the benefits of such investments only in the latter part of 2021 or 2022. I am hopeful and happy about the changes in healthcare, which is an important area for India, for the Foundation, and the Advantage program. The key is in its implementation.

Also, the act of increasing the threshold limits of the small company definitions is symbolic not fundamentally disruptive. While this will make more companies beneficiaries of the sops and concessions that the government has intending to protect them, this does not change the fundamental competitiveness of the small companies unless they build management capabilities to address and make the best use of the concessions or protection they will enjoy. It is like offering more playgrounds without skilling the players how to win. I was hopeful of deeper, capability building budgetary changes for them.”

Sameer Nigam, CEO & Co-founder of Stratbeans:

“We applaud the finance minister’s move for the MSME Sector which includes an allocation of INR 15,700 crores. Moreover, we are pleased to see the efforts outlined to ease compliance requirements for the start-up community as well as the introduction of incentives such as tax holidays and an extension in capital gains exemption by a year. The Finance Minister’s proposal to revise the definition of small companies under the Companies Act, 2013 by increasing their threshold for capitalization, is a much-needed step to benefit over two lakh companies. This step will provide a big push to startups and innovators by enabling them to grow without regulatory restriction on paid-up capital and turnover, thereby bolstering the startup ecosystem and the economy at large.”

Ketan Gaikwad, MD & CEO, Receivables Exchange Of India (RXIL):

“Continuing its unwavering support to MSMEs, the allocation of INR 15,700 crores will be key for this sector that is just emerging from the pandemic induced lockdown. This is the type of Budget that will not only encourage investment and support the Atmanirbhar Abhiyan, but also develop the quality of life for citizens of the country in the length with the planned expenditure on education, infrastructure, and healthcare systems. The Govt. will need funds and the credit policy is expected to continue to be favorable, it will be up to the RBI, to keep the inflation in check and ensure the growth of the economy.

We are glad that the Finance Minister has allocated Rs. 1,500 crores to promote digital payments in the country. Further details are awaited, we expect the funds to be utilized and support extended to the MSME ecosystem in adopting digital infrastructure, with a continued focus on formalization of the sector.”

Mr. Alok Bansal, Country Head, Visionet India:

“The allocation of a sizable amount of Rs. 15,700 crore to the MSME sector, more than double of last year, is a great motivation for mid-sized companies. The allocations for Covid vaccine aims at immediate financial support to the sector and it will have significant effects on reviving demand in other sectors”.

Mr. Vinay Jain, Founder and CEO, Grafdoer:

“The Union Budget FY 21-22 has brought a ray of hope for the general public as the government has extended eligibility of tax SOP on a home loan, which is beneficial for the sanitary-ware industry and will also provide tax exemption for affordable rental housing projects. Moreover, the new customs duty structure that has been introduced on the steel products is somewhat a relief as it has reduced duties on copper from 5% to 2.5%, it has also cut duty on copper scrap from 5% to 2.5%, and exempted duty on steel scrap for a specified period. The industry has seen a hike in the products comprising metal constituents but this will now, somehow help the manufacturers to see stability in the pricing of the products and is a matter of relief for the people.”

Mr. S Viswanatha Prasad, Founder, and Managing Director- Caspian Debt:

“The outlay for cleaning the books of public sector banks is welcome. Support of this nature is also required for NBFC who have been lending to MSMEs and likely to face increased credit costs in the aftermath of the pandemic.”

Mr. Avishek Gupta, Investment Director- Caspian Debt:

“The focus on efficient debt resolution through NCLT and superior monitoring by MCA using the AI will help MSMEs in attracting more investments. MSMEs will be incentivized to improve governance and transparency. Advanced data analytics will help in setting industry-wide benchmarks which will further improve understanding of sectors and sub-sectors in which MSMEs operate.”


Get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -
Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

More Latest Stories


Related Stories