With Narayan Rane taking over as the new MSME Minister, here is some points that he may consider for development of MSMEs in India.
MSMEs – particularly the Micro & Small segment – contribute major employment and MSMEs together contribute 30% of GDP..
With COVID already killed many MSMEs it is high time that Government and RBI to consider liberal working capital assistance to MSMEs based on the last two years of GST. The normal 20% additional working capital is not sufficient to meet the expenses already met and the immediate future expenses. 30% to 40% of this GST based working capital assistance may be released through the banks for expenses such as salary and meeting contingency expenses including maintenance of machineries. The rest of the GST based working capital assistance may be released for purchased of materials and normal cc type of activities.
This should be the immediate task of the new MSME minister.
And coming to the budget allocation for MSME, the Minister to make sure MSME budget is increased from the present 16000 crore [0.06% of the current GDP] to at least 0.30% to 0.40% of GDP – that is 85000 Crore to 115000 Crore.
This additional 70000 to 90000 Crore to be used for infrastructure development of MSME corridors, MSME clusters, infrastructures related to roads & power – that includes solar power plants for MSME corridors & clusters, research & development and testing facility creation and incubation facilities for MSMEs.
Many of the MSME Industrial Estates are in a very bad shape with bad roads, stagnating water, improper drainage, etc., These infrastructure improvements need to be attended on immediate priority basis.
Similarly setting up of special medical facilities for MSME Employees in and around the Industrial Corridors.
The extra budget amount must be also used to set up priority industries like food processing, etc.,
These are few things that need to attended by the new MSME Minister on an urgent basis.
Industry experts can comment here and contribute more ideas.