Micro, small and medium enterprises (MSMEs) are set to receive incremental business worth around Rs 2 trillion out of the Rs 3 trillion allocated to the sector in the Budget, a report says.
The Rs 3,02,885 crore allocated towards the MSME
sector can lead to a direct benefit of Rs 2,00,000 crore to the sector, according to domestic rating agency Smera Ratings.
These benefits are roughly 10.5% of the total expenditure of the Budget
estimate for 2016-17, the agency said in a note.
Read our full coverage on Union Budget 2016
The Rs 60-trillion MSME
sector contributes a whopping 37.5% of GDP and employs the most number of people.
This allocation is divided between consumption and investment categories. A sum of Rs 95,638 crore will go into consumption and Rs 2,07,247 crore to investment, it said.
The agency opines that MSME
engagement will be crucial in the implementation as both manufacturing and services based MSME
units will take advantage of this massive mobilisation of public finances.
On a standalone basis, the agency estimates that Rs 1,05,647 crore worth of business can be exclusively conducted by MSMEs.
The agency feels that implementation of various schemes such as Pradhan Mantri Gram Sadak Yojana, Kaushal Vikas Yojana, Swachh Bharat Abhiyan, Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) and Khelo India may not require the participation of large companies.
Out of the total funds, Gram Sadak Yojana will attract Rs 19,000 crore, Swachh Bharat Abiyan will get Rs 11,300 crore, and roads and highways will get Rs 26,250 crore.
will get Rs 15,400 crore (by way of materials), Krishi Sinchai Yojana Rs 2,144 crore and the National Rural Drinking Water Mission has been allocated Rs 1,875 crore.
Child development schemes will get Rs 16,120 crore, Khelo India Rs 216 crore and Gram Jyoti Yojana Rs 3,188 crore.
The opportunity created by the Budget
will create demand for services of the MSME
sector, it said.
The additional infusion of funds into Mudra and the proposed establishment of 1,500 multi-skill training institutes under the Kaushal Vikas Yojana
will facilitate this process further, says Karan Mehrishi, lead economist at Smera Ratings.