MSME expects special package from Finance Minister Sitharaman on Feb 1

The MSME sector in India urges Finance Minister Nirmala Sitharaman to provide a special package for small and medium enterprises to enhance access to credit and support growth in the economy.

The MSME sector wants Finance Minister Nirmala Sitharaman to come out with a special package for small and medium enterprises to ensure greater availability of institutional credit at competitive rates to enable it to play a bigger role as India moves closer to becoming a $5 trillion economy.

Ms. Sitharaman is scheduled to present the interim Budget 2023-24 in the Lok Sabha on February 1.

This will be the last major economic document of the government before the next general elections.

The share of MSME (Micro, Small & Medium Enterprises) sector in the country's Gross Domestic Product (GDP) in 2021-22 was 29.15%.

On expectations from the Budget, Federation of Indian Micro and Small & Medium Enterprises (FISME) said the relationship between banks and MSME is an uneven one with the balance of power heavily tilted in favour of the lenders.

"Lack of competition in the banking sector (75 per cent of banks being public sector) and weak regulatory institutions, which have not been very successful in ensuring customer centredness of banks, and near-defunct grievance redressal mechanism (Office of Banking Ombudsman) all coalesce into an unhappy experience for an ordinary MSME owner with the banks — whether private or public," FISME Secretary General Anil Bhardwaj said.

Mr. Bhardwaj expects Sitharaman to address issues faced by the MSME sector in her Budget.