Shri Rishabh C. Kothari, President Merchants’ Chamber of Commerce & Industry (MCCI)
The ECLGS had a significant impact on credit flow to the micro segment within MSME. In 2020, MSMEs received higher credit compared to 2019, primarily due to the ECLG scheme. Incremental credit in 2020 (over 2019) was much higher than the credit provided in pre-pandemic times (2019 over 2018),
This is a welcome move as several small firms, particularly in the services sector, may still need such liquidity support following the emergence of new covid variants.
The modification introduced would ensure that businesses adversely impacted by the second wave of COVID 2019 get enhanced collateral free liquidity . Further this provides much needed support to all the ECLGS borrowers (which mainly consist of MSME units) in time for the busy / festival season.
While complimenting the Hon’ble Union Finance Minister, Smt. Nirmala Sitharaman, on her 4th Budget placed in the Parliament today, Shri Rishabh C. Kothari, President, MCCI feels that the proposed budget is a fine balance between demand stimulus, continued capex push and fiscal consolidation. The budget focused on sharp rebound and recovery of economy identifying 7 engines of growth, consisting roads, railways, airports, ports, mass transport, waterways and logistics infrastructure as the key areas.
The budget prioritized on inclusive development, productivity enhancement, energy transition and climate action as the four pillars of development. The Union Budget 2022-23 is a blue print of India at 100, which is a visionary document.
Among many pro-growth measures announced in the Budget, MCCI welcomes the following:
- Creation of unified logistics platform and developments of 100 new cargo terminals in the next three years are significant steps in improving the supply chain eco system in the country.
- Intervention to improve credit to the pandemic afflicted MSME sector through ECLG Scheme including hospitality industry is also a step in the right direction.
- The Central Bank of India has introduced digital currency which actually becomes a positive move.
- SEZ Act will be replaced with a new law and we will be waiting for further details given the significant impact of this on the commercial real estate sector.
- The expansion of the Emergency Credit Line Guarantee Scheme by Rs 50,000 crore to Rs 5 Lakh crore will enable the small travel operators and stakeholders within the travel and tourism industry to reel back from the disruptive impact of the pandemic.
- Substantial amounts have been allocated towards research and development in several sectors including defence. The proposal to reserve 25 percent of the R&D Budget for startups and private entities is an excellent move.
- The emphasis on ‘Ease of Doing Business 2.0’ should bring a better policy and regulatory environment for retail; on this front, work on a national retail policy is already underway.
- 100 percent of 1.5 Lakh post offices to come onto a core banking system is a positive step and one with deep implications.
“Budget is very balanced. It boosts spending towards growth-oriented policies that create jobs, boost manufacturing, and help agri-economy & infrastructure creation. In short, a mix of short-term boost & long-term structural emphasis is hallmark of this Budget”- says Shri Rishabh Kothari, President, MCCI.