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How Budget can help increase MSMEs' contribution to global trade

Indian MSMEs aren't new to adversities. Their zeal to emerge victorious every time a challenge erupts has been tested repeatedly. Amid interest rate hikes, China's economic slowdown, the covid-led global supply chain crisis, and the ongoing Russia-Ukraine conflict, an opportunity has arisen for India's MSMEs to carve their name on the global trade map.

India's economy currently stands at nearly $3.5 trillion, making it the world's fifth largest. The Centre for Economics and Business Resea.

To help India leverage this opportunity and potentially catalyse MSMEs' contribution to global trade, the government should consider a three-pronged approach in its annual Budget 2023-24.

Basic amendments to the CGTMSE scheme that aims at providing institutional credit via unsecured loans are one of the most prominent steps to fuel MSMEs' growth. However, the scheme's lending framework has become more generalised in the quest to widen the scope to include all sections of society. In the Budget 2023-24, the government must bring the requisite focus back on catering to the needs of smaller MSMEs and provide them timely access to credit.

Additionally, the interest rate range.

The ECLGS picked up steam during covid-19 and has great potential to continue to deliver returns for MSMEs. Through the Budget, the government must create broader awareness about the scheme, including an up-to-date revision of what it entails and how MSMEs can benefit from it. Furthermore, making the scheme accessible, given the lucrative 9.25% interest rate offer for banks and 14% for NBFCs, and clear communication to MSMEs on how to get the credit line is a pending step that the Budget 2023-24 ..