Amid daunting economic challenges posed by the ongoing pandemic, Union Budget 2021 will be presented on February 1. Recently, the Finance Minister promised a 'never before' like Budget, raising high Budget expectations -- which range a wide variety-- among all sections. The MSME sector, which has taken the brunt of COVID-19, also eagerly waits for some good news. Hopes abound that Budget 2021 will be able to pave a smooth path ahead for the sector.

Among other demands, experts call for simplification of GST and reduction of its rate from 18 percent to 5 percent on professional services to boost MSMEs. Services offered by legal professionals, chartered accountants, architects, etc. and services including HR, marketing, supply chain management, etc. are widely needed by MSMEs, and experts view that such services should attract lower taxes. Also, the simpler the GST laws the better, according to them.

Fund availability is a lingering issue facing the sector. Although the Centre in recent months has taken several measures in this direction, the sector is still reeling under massive pressure, considering which experts have raised a key demand that the collateral-free loan limit should be enhanced by the government to Rs 5 crore for micro-units, Rs 15 crore for small businesses, and Rs 35 crore for medium businesses. The demand seems quite reasonable.

Meanwhile, MSME experts also want easing in the Foreign Exchange Management Act, 1999, to boost foreign investments in the country. They also want a complete overhaul in the system of foreign exchange inflows and outflows so that MSMEs can work efficiently with global partners. Similarly, industry body CII has called for creation of professionally managed financial institutions to finance key sectors, including MSMEs, and infusion of equity in SIDBI for financing the sector.

I invite your opinions.