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PwC's Ranen Banerjee on Budget expectations for MSMEs and more
Ranen Banerjee of PwC India shares his views with Business Standard's Krishna Veera Vanamali on what he expects from the upcoming Budget for the MSMEs and what the govt can do to boost demand
Ranen Banerjee, Leader Economic Advisory Services, PwC India
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2 min read Last Updated : Jan 25 2022 | 8:30 AM IST
Q1: Most MSMEs did not get time to stabilize after GST, demonetisation. Since the pandemic came right after those two big events, what should this Budget do for the revival of MSMEs? Ans:
Emergency Credit Guarantee Scheme should be extended for six months more
Budget should empower credit managers of banks with the discretion of relaxing the credit norms for MSMEs for three to six months
Ombudsman-like helpline for MSMEs get redressed when bank managers are not willing to grant credit
Set aside a fund to pay the dues to the operational creditors of MSMEs brought under the Insolvency and Bankruptcy Code between FY21-22 to FY22-23, by the government
Q2: Coming to consumer spending, the recovery was not broad based. What can the Budget do to boost demand, increase cash in hands of people? Ans:
Govt can hike allocation in NREGA
Direct cash transfer to households at the bottom of the income pyramid
Tax sops for people below income of Rs 10 lakh per year
Govt could provide for special GST compensation which can be conditional on rationalisation of some GST rates by the GST Council
Q3: This year particularly the tax revenues have been very buoyant, although disinvestment receipts somewhat discouraging. So, do you think the Finance Minister has enough fiscal headroom to be able to enhance capex spending and give demand boost to the bottom of the pyramid? Ans:
Revenue receipts of the govt are likely to exceed Budget estimates by almost Rs 6.4 trillion
Total revenue, after adjusting the disinvestment shortfall, is likely to exceed the Budget estimate by around Rs 5 trillion in this fiscal
FM should use the excess revenue to clean up the balance sheet of the govt in the last quarter and infuse additional capital to the public sector banks
Fiscal deficit for FY23 could be pegged at around 6.2% of the GDP and revenues are realised, it will give the govt additional spending headroom of about Rs 7.6 trillion during the period
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