Government studies ways to support MSMEs

The Indian government is reportedly considering a series of measures to boost Micro, Small, and Medium Enterprises (MSMEs). These measures include integrating MSMEs with international markets, providing digital support for global competitiveness, easing compliance with Goods and Services Tax (GST) laws, and offering low-cost credit. The government aims to make MSMEs globally competitive and address the high cost of credit, a significant obstacle to their growth. While the intent may be announced in the interim budget on February 1, details of the schemes are expected to be unveiled in the full budget for 2024-25 by July. The government is particularly focused on reducing the cost of credit, which is seen as a major hindrance to MSME growth.

The Emergency Credit Line Guarantee Scheme (ECLGS) was acknowledged as beneficial, but the government aims for a more targeted approach to benefit a larger portion of the MSME sector. The Finance Minister highlighted the importance of integrating MSMEs with international trade for global prosperity. Ease of doing business, including simplified GST compliance, is also emphasized as crucial for the sector's global competitiveness. The government had previously introduced the ECLGS as part of the Atmanirbhar Bharat Abhiyan economic stimulus package in response to the COVID-19 pandemic. The MSME sector has been a key focus for the Indian government in revitalizing the economy, with a redefined scope effective from July 1, 2020. The classification includes micro, small, and medium enterprises based on investment in plant and machinery as well as turnover thresholds.