“Like any other budget, the Union Budget of 2018 comes with many hopes and expectations for the country. This year’s budget is a bit special for a few reasons; one being, that it is the last full year budget for the current government (Govt.). Secondly, the country saw two major events the demonetisation and implementation of GST. Thirdly, implementation of IBC as it sinks in is a dramatic mind set change for Corporate India, this year we will witness depth of its effectiveness and the changes that it brings in.
I would like to congratulate the Govt. for bringing in the reforms and its efforts to put the economy on the growth trajectory. Some of the last year’s initiative such as Mudra loans has put a cheer back on the faces of MSMEs; the Govt. has claimed an achievement of 95% in loans disbursal under the scheme.
The monumental step of recapitalisation is a major move in strengthening the public sector banks (PSBs). With focus on themes such as customer responsiveness, responsible banking, credit off-take, PSBs (public sector banks) as Udyami Mitra, deepening financial inclusion and digitalisation and developing personnel for brand PSB, the Govt. is making an all-out effort in creating strong financial institutions.
Initiatives of the government such as Skill India, Make in India, among a host of other steps taken are all coming together like pieces of jig saw puzzle in supporting MSMEs and strengthening the economy.
One of the greatest challenge faced by the Govt today is new job creation. MSMEs actually can play a significant role in meeting this objective and hence we expect the Govt to come out with fresh incentives for the MSMEs going ahead.
Launch of TReDS
Last year, three entities received licence for starting TReDS platforms. The Govt. views it as one of the crucial ways to support MSME sector by providing a tech based access to the much needed working capital through an online and transparent bid mechanism.
The Govt. has supported the growth of the nascent sector by advising PSUs and PSBs to register themselves on the platform. I appreciate the efforts of the government in pursuing with all the stakeholders to increase traction on the TReDS platform.
In the coming budget we expect the Finance Ministry to continue to provide easier access for MSMEs to institutional credit and strengthen them through a more relaxed regulatory framework.
Secondly I would like to focus on the important issue of credit insurance which could be provided to the MSMEs coming onto to the TReDS platform for bill discounting. Just as ECGC has been protecting the small exporters from default risk of the Foreign Buyer, we also need a similar product for small MSMEs to cover default by their buyers in the domestic market.
I look forward to a policy framework which enables a sustainable and inclusive development of the country with strong financial institutions lending to MSMEs.”