Budget 2023: What Should MSMEs Expect?

India's participation in global decision-making platforms like the G7/20, Asia's significance in global geo-eco-political interactions, India's competitive position against China, rise in terrorism and national security threat after a relatively quiet period of 2020–2022, de-escalation of the Russia–Ukraine crisis,  stabilization of commodity and currency cycles, inward-looking policy framework of the governments, and Seems daunting, huh?

The real potential of MSMEs is still unexplored and just exists on paper. In the past ten years, numerous initiatives have been made to address basic inefficiencies and address financial, infrastructure, and production bottlenecks. The National Entrepreneurship Mission's current wave of policymakers' efforts to help startups and MSMEs realise their full potential is moving the country on the right path. What should MSMEs expect from the union budget in 2023?

The administration must broaden the application of and quicken the speed of significant policies that were previously announced. Raising and Accelerating MSME Performance (RAMP), Gati Shakti (GS), Production Linked Incentives (PLI), Open Network for Digital Commerce (ONDC), Account Aggregator (AA), National Logistics Policy (NLP), National Entrepreneurship Mission (NEM), and Payment Infrastructure Development Fund (PIDF) are all programmes that aim to improve the performance of small and medium-sized enterprises (MSME) and are expected to increase employment, improve physical and digital infrastructure, increase market share globally, and improve manufacturing.

These schemes' exploration will also make us better equipped to deal with spikes in commodity prices and foreign exchange rates, which will help us control increases in the price of raw materials and the ensuing profit margins that businesses realise. For market access and convenience of doing business, all Udhyam registered MSMEs (estimated to number 50 million by the end of 2023) should be digitally connected to ONDC and other digital platforms.

Given the weak demand environment and mild global recession, MSMEs would benefit from the extensions of the schemes (ECLGS), Credit Guarantee Scheme for Subordinate Debt (CGSSD), as they will aid the businesses in managing interest and debt burdens, lowering the cost of long and short term capital. This will help India remain globally competitive and financially sound to reach the pre-Covid or better levels of Earnings Before Tax (EBT) margins.