Business

Budget 2020 may see higher fund allocation for MSME sector, says report

Updated : January 15, 2020 09:31 AM IST

The MSME ministry has sought a 71 percent increase over and above the budgetary allocation made last year, the report said, citing Nitin Gadkari.

There are as many as 63.38 million MSMEs in India—all firms with physical capital valued at less than Re 10 crore, it added.

The government is likely to announce higher funds for small and medium businesses in Budget 2020 as they are currently battling a demand slowdown and liquidity crunch, reported Mint.

The micro, small and medium enterprises (MSME) ministry has sought a 71 percent rise over and above the budgetary allocation made last year, MSME minister Nitin Gadkari told Mint.

“We have sought Rs 12,000 crore budgetary allocation for MSMEs in the upcoming Union Budget," Gadkari was quoted as saying in the report. The industry has been allocated Rs 7,011 crore for the current financial year.

Gadkari’s statement is significant as the sector is considered a key driver in job creation and economic growth in developing nations and as India attempts to revive economic growth that hit a six-year low of 4.5 percent in the July-September quarter.

According to the report, MSMEs account for about 45 percent of manufacturing output, more than 40 percent of exports, over 28 percent of gross domestic product (GDP) and employ about 111 million people.

There are as many as 63.38 million MSMEs in India—all firms with physical capital valued at less than Rs 10 crore, it added.

“The MSMEs are rightly labelled as the backbone of Indian economy, given their wide presence in every sector and their close relationship with larger companies as suppliers and partners. MSMEs need to be nurtured in order to drive three essential factors in today’s economy—exports, employment and entrepreneurship," Mint quoted Chandrajit Banerjee, director-general, Confederation of Indian Industry (CII) as saying.

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Budget 2020 may see higher fund allocation for MSME sector, says report

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