Budget 2022-23: Highlights for SMEs and MSMEs

The Union Budget aims to simplify the customs rate and tariff structure, particularly for sectors like chemicals, textiles & metals.

The FY22 expenditure was revised to Rs 37.7 lakh crore. Also, the FY22 fiscal deficit is estimated at 6.9 per cent of the GDP. In FY23, the fiscal deficit was pegged at 6.4 per cent of the GDP. Also, the FY23 Capex is targeted at Rs 7.50 lakh crore. FY23 effective Capex was seen at Rs 10.7 lakh crore. The SMEs and the MSMEs have continued to be under stress due to the successive waves of the pandemic, which have not only disrupted their operations but also, impacted demand, particularly in services. The extension and expansion of the ECLGS Scheme to Rs 5 lakh crore is a step in the right direction to provide further liquidity relief to these sectors. Further, the plans to revamp the credit guarantee fund have been announced to make it more effective. New railway routes have been planned, which would benefit SMEs as well as the farmers.   

Also, there are provisions to facilitate the domestic manufacturing for an ambitious goal of 280 GW installed solar capacity by 2030 along with an additional allocation of Rs 19,500 crore for PLI for the manufacturing of high-efficiency modules with a priority to fully-integrated manufacturing units to solar PV modules will be made. A few exemptions were introduced on inputs, like specialised castings, ball screw, and linear motion guide to encourage domestic manufacturing of capital goods.  

The Union Budget aims to simplify the customs rate and tariff structure, particularly for sectors like chemicals, textiles & metals. It would also minimise disputes along with the removal of exemption on items, which are or can be manufactured in India, providing concessional duties on the raw materials that go into the manufacturing of intermediate products in line with the objective of ‘Make in India’ and Atmanirbhar Bharat. Duty concessions to be a major part of the transformation for mobile module manufacturing and certain other items thereby, enabling high growth in electronic items from domestic manufacturers.