Union Finance Minister Nirmala Sitharaman last week presented the first budget of the Modi government in its second term. She laid down a 10-point vision to transform India's economy to reach USD 5 trillion by 2025. In her Budget speech, the minister stressed the need to invest in infrastructure, digital economy and job creation in small and medium enterprises, and it is good to see that the Budget – as far as the MSME sector is concerned – comes with some encouraging proposals.

Some major announcements for MSMEs in the Budget include: allocation of Rs 350 crore under the Interest Subvention Scheme for fresh and incremental credit to MSMEs; amendments to Factoring Act, 2011 to facilitate listing of NBFCs on the TReDS Platform, a measure that will help more MSMEs access discounting for their invoices; creation of a delayed payment platform for the sector to enable filing of bills and payment; loans up to Rs. 1 lakh for one woman in every SHG under the MUDRA scheme, etc.

Some other important announcements include: extension of rate of 25 % Corporate Tax to companies with annual turnover up to Rs 400 crore; emphasis on MSMEs under the Make in India scheme; extension of the Stand Up India Scheme up to the year 2025; focus on skill development in new-age areas like AI, IoT, Big Data, 3D Printing, Virtual Reality and Robotics; and consolidation of ASPIRE scheme for setting up of 80 Livelihood Business Incubators and 20 Technology Business Incubators, etc.

The above announcements are welcome. It is also encouraging that the Budget has recognised the critical role of MSMEs in taking India to a USD 5 trillion economy. Welcoming the Budget announcements, the MSME minister said his ministry has decided to raise the sector's contribution to 50 percent of the country's GDP in the next five years, creating 15 crore jobs. No doubt, it, though difficult, is possible, but to achieve this goal the Centre must put constant efforts in this direction in the coming years.

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