Union Minister Nitin Gadkari on Friday welcomed the announcements for MSMEs in the Budget and said his ministry has decided to raise the sector's contribution to 50 per cent of the country's GDP in the next five years from 29 per cent currently and provide jobs to 15 crore people.
"The speciality of this Budget is that our small-scale and medium-scale industries have received maximum encouragement. (MSMEs) have a contribution of 29 per cent in our country's GDP and the department has decided that we will increase the contribution to 50 per cent of the GDP," said Gadkari, Union Minister for MSME and Road, Transport and Highways.
He added that till now, 11 crore persons have received employment in MSMEs. "We will add 5 crore jobs to this and take the number to over 15 crore in five years."
The government on Friday proposed creating a payment platform for micro, small and medium enterprises (MSMEs) to enable filing of bills and facilitate timely payments.
Unveiling the first Budget of the Modi 2.0 government, Finance Minister Nirmala Sitharaman highlighted the need to invest towards job creation in small and medium enterprises.
"Government payments to suppliers and contractors are a major source of cash flow, especially to SMEs and MSMEs. Investment in MSMEs will receive a big boost if these delays in payments are eliminated," Sitharaman said.
Besides, she said Rs 350 crore has been allocated for 2019-20 for 2 per cent interest subvention for all GST-registered MSMEs for fresh or on incremental loans under the interest subvention scheme for such enterprises.
The government will create a payment platform for MSMEs to enable filing of bills and payment on the platform itself, Sitharaman said.
She said that in two years, 300 entrepreneurs have emerged as a result of Standup India scheme.
The scheme will be continued for the entire period coinciding with the tenure of the 15th Finance Commission (2020-2025), the finance minister added.
Sitharaman said the government aims to set up more common facility centres under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI). She said this will facilitate cluster-based development to make the traditional industries more productive, profitable and capable for generating sustained employment opportunities.
The focused sectors are bamboo, honey and khadi clusters. SFURTI envisions setting up of 100 new clusters during 2019-20 to enable 50,000 artisans to join the economic value chain.
The Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship has also been consolidated for setting up of livelihood business incubators and technology business incubators. The scheme contemplates setting up of 80 livelihood business incubators and 20 technology business incubators in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry, Sitharaman said.
She further said the government has decided to extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs 1.5 crore under a new scheme named Pradhan Mantri Karam Yogi Maandhan Scheme. Enrolment into the scheme will be kept simple requiring only Aadhaar and a bank account and the rest will be on self-declaration.The Union Budget has also made proposals under indirect taxes to promote Make in India, that may also benefit the MSME sector. To provide domestic industry a level-playing field, basic customs duty is being increased on items such as cashew kernels, PVC, vinyl flooring, tiles, metal fitting, mountings for furniture, and automobile parts.