Budget 2018: SME sector hopeful of new mechanisms

With this year's Union Budget scheduled to be presented in two days, anticipations are rife on what the government has in store for various sectors, especially post the rollout of the Goods and Services Tax (GST).

Anticipating changes CEO Power2SME, R. Narayan has said, "With approximately 51 million units, Indian MSME sector is gaining widespread momentum and attributing to more than one-third of the total GDP of the country. Our expectations from the Union Budget 2018 are further development of the MSME sector by introducing new mechanism to solve monetary grievances as the sector faces problems related to delayed payments and bounced cheques."

Adding to this, he said that in order to make MSMEs more competitive and financially stable, there is an urgent need to improve financial assistance to the sector by providing relaxation in the interest rates on loans and further provision of tax Rebate to MSMEs.

"Given the right support, manufacturing sector can become a hot bed for entrepreneurial activities, leading India to explore a new phase of growth with manufacturing startups and SMEs as growth catalysts," he further added.

"The government recently announced recapitalisation of banks: a move which strengthens the NPA-hit public sector banks and includes recapitalisation bonds, budgetary support, and equity dilution. A re-orientation in lending towards SME's is also being encouraged by the government. This capital infusion will be accompanied by reforms to enable the state-owned banks to play a major role in the financial system and give a strong push to job-creation in the MSME sector", he concluded.