MSME sector expectations from FM Nirmala Sitharaman on Budget 2021

Impacted by COVID-19 pandemic, no sector has been left unharmed; and in between the micro small and medium enterprises (MSME) sector endured the maximum harm.

Presenting the Union Budget 2021 is not far away, and industry leaders are hoping that Finance Minister Nirmala Sitharaman will consider their requests while presenting her Union Budget 2021-22 on February 1.

The government notified a Rs. 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) under the Aatmanirbhar Bharat Abhiyan package valid up to March 21, 2021, in order to reduce the hardships borne by MSMEs.

Whether the Budget 2021 will bring more relief or not, are checked out by Moneycontrol, as well as the experts' expectations for MSMEs from FM Sitharaman and what is likely in budget for the sector injured by massive liquidity crunch, labour shortages, and non-payment of dues:

What does MSME expect from Budget 2021?  

Based on a report by Financial Express, experts have suggested the GST on professional services be cut to 5 per cent from 18 per cent to boost the MSME sector.

The MSME body Federation of Indian Micro and Small & Medium Enterprises (FISME) has sought a temporary suspension of Basel norms to ease lending from the banking sector to the small businesses, the report mentioned, as well.

Experts feel the government must increase the collateral-free loan limit to Rs. 35 crore for medium businesses, Rs. 15 crore for small businesses and Rs. 5 crore for micro-units.

What is FM Nirmala Sitharaman likely to notify for MSME sector in Budget 2021?

Earlier Moneycontrol had reported that government is considering easing NPA classification norms to provide relief to the MSMEs and small businesses.

Currently, non-payment of loan amount more than 90 days is termed as a non-performing asset (NPA). The government is considering increasing the limit to 120-180 days for NPA classification.

According to the report of Zee Business, among the other announcements is the development of a one- stop mobile app for the MSMEs. 

"The app is expected to be a one-stop centre for all the necessities like registrations, enrollment for GST, legal and tax compliance among other things," reported Zee biz.