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Banking industry

MSMEs Seek Government Intervention for Credit and Finance in Next Budget

Strategic Insights

— 2 min read

The Federation of Indian Micro and Small & Medium Enterprises (FISME) has requested the government to set up a joint committee to develop a unique rating model for MSMEs, focusing on solvency. This appeal comes as part of the pre-budget meeting with Finance Minister Nirmala Sitharaman, where industry bodies and experts presented their expectations for the upcoming budget. The MSME industry body expressed concerns about bank loan rating (BLR) requirements, which restrain the growth of MSMEs. FISME suggested forming a task force to study the issue and propose remedial measures. Other industry bodies, such as PHD Chamber of Commerce and Industry (PHDCCI) and Confederation of Indian Industry (CII), also presented their demands, including infrastructure investments, special purpose vehicles for infrastructure projects, and reduced levies and taxes on the telecom sector.

Key Takeaways:

  • The Federation of Indian Micro and Small & Medium Enterprises (FISME) asked for government intervention by setting up a joint committee to develop a unique rating model for MSMEs, focusing on solvency.
  • FISME suggested forming a task force to study the bank loan rating (BLR) requirements on MSMEs and propose remedial measures.
  • PHD Chamber of Commerce and Industry (PHDCCI) proposed that infrastructure investments in the country should not be less than 10 per cent of the GDP.
  • Confederation of Indian Industry (CII) called for setting up a separate Special Purpose Vehicle (SPVs) in the infrastructure sector for individual infrastructure projects.
  • Cellular Operators' Association of India (COAI) sought a reduction of levies and taxes on the telecom sector, including rationalization of GST, reduction of licence fee to one per cent, and lowering of customs duty on equipment.
  • Telecom operators like Reliance Jio, Bharti Airtel, and Vodafone Idea are part of the COAI.
  • The auto industry expressed the need for long-term policies to establish India as a strong electric vehicle (EV) manufacturing base and sought government support for reskilling the workforce.

Statistics:

  • FISME expressed concerns about bank loan rating (BLR) requirements, which restrain the growth of MSMEs.
  • 10 per cent of the GDP: PHDCCI proposed that infrastructure investments in the country should not be less than 10 per cent of the GDP to reach developed economy status by 2047.
  • 3 per cent: current licence fee paid by telecom operators.
  • 1 per cent: licence fee reduction sought by the Cellular Operators' Association of India (COAI).
  • Four per cent: pre-payment penalties levied by some private banks on MSMEs who change banks due to poor services.

Sources:

  • Press Trust of India (PTI)
  • Federation of Indian Micro and Small & Medium Enterprises (FISME)
  • PHD Chamber of Commerce and Industry (PHDCCI)
  • Confederation of Indian Industry (CII)
  • Cellular Operators' Association of India (COAI)
  • Union Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad
  • IE Online Media Services Pvt. Ltd. (distributed by Contify.com)

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