The recent Union Budget unveiled several promising initiatives aimed at fostering the growth of MSMEs. Among the noteworthy measures is the increase in the MUDRA loan limit from ₹10 lakhs to ₹20 lakhs for those who have successfully repaid their previous loans. I have no doubt in my mind that this significant enhancement is poised to enable new MSMEs to expand and develop their businesses more robustly.

A particularly commendable provision, I would say, is the assurance of continued access to credit, even during financially challenging times. MSMEs frequently struggle with financial constraints and liquidity crises, making this measure a crucial lifeline. By ensuring that MSMEs can secure new equipment and machinery and manage operational costs, this provision will help them mitigate losses, maintain operations, and foster a more positive business environment.

Another significant announcement is the creation of e-commerce hubs under public-private partnerships (PPP). This initiative will definitely aid MSMEs in marketing their products, exploring international markets, and enhancing the global reach of Indian MSMEs. Additionally, the announcement that public sector banks will develop their capability to assess MSMEs for credit based on their digital footprint rather than traditional balance sheets is a forward-thinking step.

However, it was surprising that the government did not revisit the 45-day payment rule, which mandates that payments to MSMEs must be made within 45 days or face taxation on the outstanding amount. This omission has left the industry disappointed, as there have been ongoing concerns about contract cancellations and tax burdens associated with this rule.

I invite your opinions on these developments. How do you think these measures will impact the MSME sector?