Finance Minister Nirmala Sitharaman has unveiled a bold new strategy to empower India’s MSME sector. Presented during the Budget speech from the newly constructed Kartavya Bhawan, the plan centers on creating future champions. This initiative is part of a broader push to accelerate and sustain economic growth.
The minister outlined three core duties, or kartavyas, guiding the government’s approach. These are accelerating growth, fulfilling aspirations, and building capacity for inclusive development. The focus on MSMEs falls squarely under the first of these critical missions.
Recognizing MSMEs as a vital engine of growth, the government is deploying a three-pronged support system. This comprehensive approach covers equity, liquidity, and professional assistance. The goal is to nurture these enterprises into robust, competitive champions.
The cornerstone is a dedicated Rs 10,000 crore SME Growth Fund. This substantial fund aims to incentivize enterprises based on select performance criteria. Its purpose is to create the future champions of the Indian economy.
Beyond this, existing support mechanisms are being strengthened. The Self-Reliant India Fund will receive a Rs 2,000 crore top-up. This infusion will continue providing crucial risk capital to micro enterprises.
For liquidity, the focus is on fully leveraging the TReDS platform. Over Rs 7 lakh crore has already been channeled to MSMEs through this system. Now, new measures will unlock its full potential.
One key step is mandating TReDS for all purchases from MSMEs by Central Public Sector Enterprises. This move will set a powerful benchmark for the private corporate sector to follow. It ensures faster and more reliable settlement for small suppliers.
Additionally, a credit guarantee mechanism via CGTMSE will be introduced for invoice discounting on TReDS. This reduces risk for financiers and makes credit more accessible. Linking the Government e-Marketplace with TReDS will further streamline financing for government contracts.
Innovation continues with a proposal to treat TReDS receivables as asset-backed securities. This development can help create a vibrant secondary market. Enhanced liquidity and smoother transaction settlements will be the result.
Professional support forms the third pillar of the strategy. Institutions like ICAI, ICSI, and ICMAI will design short-term, practical courses. These will train a cadre of ‘Corporate Mitras’ in smaller towns.
These accredited para-professionals will assist MSMEs with compliance at affordable costs. It addresses a significant pain point for growing businesses. Access to expert guidance will no longer be confined to major metros.
The budget also introduced other supportive reforms for MSMEs. Extended timelines for filing revised returns will allow error correction without penalty fear. This fosters a more trusting and cooperative tax environment.
Simplified TDS rules for manpower supply will specifically aid labour-intensive MSME sectors. Furthermore, converting penalties into fees for procedural lapses aims to reduce litigation. The shift promotes trust-based compliance over adversarial enforcement.
The Reform Express, as termed by the Finance Minister, is charging ahead. This multi-faceted package for MSME champions demonstrates a clear commitment. By bolstering equity, liquidity, and expertise, the ecosystem is poised for a significant leap.