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Center proposes to double the allocation for MSMEs in Budget for next fiscal

The Center has proposed to more than double the allocation for the Micro, small and medium enterprises (MSMEs) in the  Budget for the next fiscal. It has made provision of fifteen thousand seven hundred crore rupees for the sector. Government has taken a number of steps to support the MSME sector. These include reduction of customs duties on certain products to protect MSMEs from sharp rise in iron and steel prices and  providing incentive to exporters of garments, leather and handicraft items among others.

MSMEs and other user industries which were severely hit by a recent sharp rise in iron and steel prices are bound to get the much needed boost in the Budget. The government has proposed to reduce Customs duty uniformly to 7.5 per cent on semis, flat and long products of non-alloy, alloy, and stainless steels. Finance Minister Nirmala Sitharaman proposed to revoke anti-dumping duties and countervailing duties on certain steel products. To provide relief to metal recyclers. Also the proposal provides for exempting duty on steel scrap for a period up to 31st March, next year.  The duty on copper scrap is being reduced from 5 per cent to 2.5 per cent to provide relief to copper recyclers. As an incentive to exporters of garments, leather, and handicraft items, the government is rationalising exemption on import of duty-free items. It is also withdrawing exemption on imports of certain kinds of leathers as they are domestically produced in good quantity and quality, mostly by MSMEs. The government is also raising customs duty on finished synthetic gemstones to encourage their domestic processing. The government is uniformly reducing the basic customs duty rates on caprolactam, nylon chips and nylon fiber to 5 per cent. This will help the textile industry, MSMEs and exports. The Budget also provides for the introduction of a special framework for debt resolution in respect of MSMEs. Through these steps and a higher allocation for the MSME sector, the government aims at achieving inclusive development and the vision of AtmaNirbhar Bharat.

 

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