Touted to be pro-entrepreneur and pro-MSME, Finance Minister Nirmala Sitharaman
‘s first budget did contain a slew of pro-MSME sector announcements. We delve deeper into the key numbers and how they fare compared to those last year.
When it comes to budgetary allocation for the MSME Ministry, it stands at an all-time high of Rs 7,011.29 crore – an increase of 6.99% from the FY 2018-19 figures of Rs 6552.61 crore.
What went down:
However, every Budget juggles with allocation, where some schemes get additional amount, the others see curtailed funding. The allocation of the Prime Minister Employment Generation Programme (PMEGP) has been increased from last year’s allocation of Rs 1800.64 crore to Rs 2327.10 crore – an increment of 29.23% this year, the much useful Government’s Credit Support Programme (CSP) for MSMEs, standing last year at Rs 700 crore, was curtailed to Rs 597- registering a dip of 14.71%.
Similarly, the Government’s crucial Performance and Credit Rating Scheme saw a huge drop in its last year’s allocation of Rs 5 crore. For FY 2019-20, the scheme has now been allocated a meagre Rs 4 lakh — a drop of 99.2% from its earlier figure.
Further, Interest Subsidy Eligibility Certificate Scheme, much useful to the country’s MSMEs, that last year was allocated Rs 50 crore, does not have any allocation this year.
Interestingly, figures for various schemes meant for Technology Upgradation and Quality Certification, many of which did find a mention in the Nirmala Sitharaman’s speech offer a contrasting picture.
The biggest difference comes in the form of allocation to Government’s flagship schemes called ASPIRE (Promotion of Innovation, Rural Industry and Entrepreneurship) scheme.
Launched on 18th March 2015 to accelerate entrepreneurship and to promote startups for innovation and entrepreneurship in agro-industry, the flagship scheme last year had an allocation of Rs 232 crore. This year it has been reduced to just Rs 50 crore, registering a drop of 78.44%. Noteworthy is, the crucial scheme with a focus on setting up Livelihood Business Incubation Centre (LBI), Technology Business Incubation Centre (TBI) and Fund of Funds (FoF), did find a mention in the FM speech this time. Using the scheme, Sitharaman talked of establishing 80 livelihood business incubators and 20 technology business incubators to produce 75,000 skilled entrepreneurs in agro-rural industries. The Finance Minister, however, talked about some form of consolidation of the ASPIRE and it is not immediately clear if the drop in allocation is because of this.
Further, the allocation for Credit Linked Capital Subsidy (CLCSS) and Technology Upgradation Scheme (TEQUP) that last year stood at Rs 1006 crore was curtailed to Rs 705.78 — a drop of 29.84%. Taking the total allocation for all the schemes in the head of Technology Upgradation and Quality Certification, it could be observed that the last year’s total allocation of Rs 1238 crore has now been brought down to Rs 755.78 crore for FY 2019-20.
What went up:
It’s not that the Government has slashed budgets across all major MSME budgetary heads. Bringing some cheers to the MSME fraternity, the Interest Subvention Scheme for Incremental Credit to MSMEs, whose revised estimates for FY 2018-19 stood at Rs 275 crore, has now been increased to Rs 350 crore.
Overall speaking, the total allocation under Prime Minister Employment Generation Programme (PMEGP) and other Credit Support Schemes (CSS) this time been hiked from last year’s total figure of Rs 2555.64 crore to Rs 3274.14 crore for FY 2019-20.
For Market Promotion Scheme Procurement and Marketing Support Scheme, last year’s allocation of Rs 65.00 has been hiked to Rs 87.60 crore. While the biggest highlight of this sub-segment is the fact that the Government appears to have outlined its intent of putting increased focus on enhancing Indian MSMEs’ global connect. This is evident from the fact that it has significantly hiked the allocation under its international Cooperation Scheme (ICS) from last year’s figure of Rs 5 crore to Rs 30 crore. However, interestingly, it reduced the share of its Marketing Assistance Scheme (MAS) from Rs 15 crore to 10.03 crore this time. In total, the budgetary allocation for all the Market Promotion Scheme meant for MSME sector has this time been increased from Rs 85 crore to Rs 127.63 crore.
This time, the total allocation for Development of Khadi, Village and Coir Industries has also been slightly increased from Rs 1215.60 crore to Rs 1252.65 crore.
Government’s various schemes bracketed under its Entrepreneurship and Skill Development schemes, encompassing sub-schemes such as Rajiv Gandhi Udyami Mitra Yojana, MSME Fund, promotional services for institutions and assistance to Training Institution has also been increased from Rs 340.01 crore to Rs 479.91 crore this year.