Budget 2008-09 - very little for SMEs, nothing for exporters!

Bikky Khosla | 04 Mar, 2008
Despite the fact that P Chidambaram came out with a populist Budget, there is a general feeling amongst the SME sector and the export community that they have been given the cold shoulder.

It was good thinking on the part of P Chidambaram to come up with the proposal to create a risk capital fund in the Small Industries and Development Bank of India (SIDBI). This will give a fillip to the micro, small and medium enterprises.

To expand the reach of NABARD, SIDBI and NHB was another good move in the Budget.

The fund of Rs. 5,000 crore in NABARD to enhance its refinance operations to short term cooperative credit institutions, two funds of Rs. 2,000 crore each in SIDBI — one for risk capital financing and the other for enhancing refinance capability to the MSME sector and a fund of Rs.1,200 crore in NHB to enhance its refinance operations in the rural housing sector. These funds can go a long way to help MSMEs. The slash in excise duties by 2 percent will help the SMEs too.

Having said that, the SME sector was expecting the Finance Minister to bring down borrowing cost, which didn't happen. SMEs were also expecting that P Chidambaram would make a 4 percent across-the-board cut in excise duties so that the country could move towards the composite Goods and Service Tax (GST) regime — which didn't happen too.

I think it will not be too harsh to reiterate that 'SMEs are supposed to be the backbone of the economy....There is zero in the budget for us.'

Meanwhile with the rising rupee making exports more and more unprofitable, the exporters were looking for certain initiatives in the Budget, which didn't come.

No wonder the Union Commerce Minister Mr Kamal Nath is unhappy too. So, as both the exporters and SMEs come to grips with this year Budget, it's going to be a long wait for all till the Annual Supplement to the Foreign Trade Policy is announced. So much for a election year Budget!