Budget 2021 is just around the corner and industry captains are hoping Finance Minister Nirmala Sitharaman will give their requests due consideration when she presents her Union Budget 2021-22 on February 1.
While the COVID-19 pandemic has left no sector unharmed, the micro small and medium enterprises (MSME) sector is believed to have borne the maximum brunt.
To alleviate the pain of MSMEs, the government announced a Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) under the Aatmanirbhar Bharat Abhiyan package valid until March 21, 2021.
But could Budget 2021 bring more relief? Moneycontrol takes a look at what experts expect for MSMEs from FM Sitharaman and what is likely in store for the sector that has been marred by massive liquidity crunch, labour shortages, and non-payment of dues:
What does MSME expect from Budget 2021?
As per a report by Financial Express, experts have suggested the GST on professional services be cut to 5 percent from 18 percent to boost the MSME sector.
The report also states the MSME body Federation of Indian Micro and Small & Medium Enterprises (FISME) has sought a temporary suspension of Basel norms to ease lending from the banking sector to the small businesses.
Experts feel the government must increase the collateral-free loan limit to Rs.35 crore for medium businesses, Rs 15 crore for small businesses and Rs 5 crore for micro-units.
What is FM Nirmala Sitharaman likely to announce for MSME sector in Budget 2021?
Moneycontrol had earlier reported that government is considering easing NPA classification norms to provide relief to the MSMEs and small businesses.
Currently, non-payment of loan amount above 90 days is termed as a non-performing asset (NPA). The government is considering increasing the limit for NPA classification to 120-180 days.
Among the other announcements is the development of a one-stop mobile app for the MSMEs, Zee Business reported.
The app is expected to be a one-stop centre for all the necessities like registrations, enrollment for GST, legal and tax compliance among other things, Zeebiz reported.