Union Budget 2022 for MSME Sector
On 1st February, 2022, the Finance Minister of India announced the union budget for the financial year of 2022-23. Thus, we decided to decode the budget for you in simpler terms and help you understand how one can be benefited from the declared schemes this year. Before we jump to the part where I explain you about the benefits to various industries coming under MSMEs, let’s go through the brief summary of the Union Budget 2022-23.
Union Budget 2022 Highlights:
In this year’s budget, the Finance Minister has focused more on to making India a cleaner, sustainable and eco-friendly nation. The union budget 2022 highlights includes improvising the infrastructure; focusing more on organic food and avoiding the usage of chemical free farming methods; building a strong base for electric vehicles thus a cleaner energy; usage of technology in farming i.e. introduction of drones in agriculture; and lastly, making India a hub for electronics & IT hardware.
The union budget 2022 highlights also mentioned that last year India has received excellent response for Production Linked Incentive (PLI) scheme under Aatmanirbhar Bharat Initiative. It has an expected potential to create 60 lakh new jobs and additional production of 30 Lakh Crores in coming 5 years.
Union Budget 2022 for Manufacturing Sector:
As mentioned in the Union Budget 2022 Highlights this year the budget is focused more on sustainable, and Aatmanirbhar Bharat. Now let’s understand how we can contribute towards the growth of India’s economy by availing the benefits and schemes provided by the Indian government in union budget 2022 for manufacturing sector.
Food Manufacturing Businesses:
- In Union Budget 2022 for Manufacturing Sector, the Finance Minister declared that Chemical-free natural farming to be promoted in India.
- Use of Kisan drones will be promoted for crop assessment, digitization of land records.
- Spraying of insect pesticides Rs2.37 lakh crore worth of MSP direct payments to wheat & paddy farmers.
- Fund to be facilitated through NABARD to finance startups for agriculture and rural enterprise, relevant for farm produce value chain.
To understand what food business opportunities are opened up via Union Budget 2022 for MSME Sector. Read More.
Green Energy, Renewable Energy Manufacturing Business:
- To facilitate domestic manufacturing for ambitious goal of 280 GW of installed solar capacity by 2030.
- Additional allocation of Rs. 19,500 Cr for PLI for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules has been announced in Union Budget 2022 for Manufacturing Sector.
- Union Budget 2022 for Manufacturing Sector will focus on Green Energy, inventory management and reducing #logistics costs.
- Push for Electric Vehicles to encourage private sector to offer #battery as a service.
- Battery swapping policy & inter-operability standards will be formulated to counter charging station issues in states.
- Implementation of the Ken Betwa Linking project at an estimated cost of Rs 44,605 crore to be taken up with irrigation benefits to 9 lakh hectare farmland, drinking water to 62 lakh people, 103 MW hydropower and 27 MW Solar Power generation.
To understand what Renewable Energy manufacturing business opportunities are opened up via Union Budget 2022 for MSME Sector. Read More.
Electronics and IT Hardware Manufacturing Business:
- The market size for just the drones is estimated to be around Rs20-30,000 crore.
- Out of this, even if 10-15% is adopted in agriculture, it will have a huge impact on the sector.
- There a lot of small and medium companies as well as established original equipment manufacturers (OEMs).
- Duty concessions being given to promote electronics manufacturing, wearable and hearable devices included.
- Duty concessions to [parts of mobile phones including camera module etc.
To understand what Electronics & IT Hardware manufacturing business opportunities are opened up via Union Budget 2022 for MSME Sector. Read More.
Defense Manufacturing Business:
- The total budget for defense has been increased in 2022-23 to Rs. 5.25 lakh crore, up from Rs 4.78 lakh crore in 2021-22.
- 68% of the capital procurement budget will be earmarked for domestic industry in 2022-23 out of which 25% of the union budget has been set aside for defense R&D budget for start-ups and private entities.
- This budget will also be utilized to cover heavy and medium vehicles, other equipment, rolling stock, Rashtriya Rifles and other tangible expenses along with Research & Development.
To understand what Defense manufacturing business opportunities are opened up via Union Budget 2022 for MSME Sector. Read More.
Furthermore, the Union Budget 2022-23 also included benefits that shall assist the MSMEs in expanding their business.
Benefits to MSME in Union Budget 2022:
“The MSMEs portals such as Udyam, e-shram, NCS & Aseem will be inter-linked, thus their scope will be widened. They will now perform as platforms with live organic databases providing G-C, B-C & B-B services such as credit facilitation, enhancing entrepreneurial opportunities. A fund with blended capital raised under co-investment model facilitated through NABARD to finance startups in agriculture & rural enterprises for farm produce value chain.” Quoted ET Now in their Report.
Credit and performance schemes for MSMEs:
- ECLGS to be extended till March 2023 to benefit business growth for MSME-focused banks and NBFCs. ECLGS guarantee cover is proposed to be expanded by INR 500 billion to a total cover of INR 5 trillion with the additional amount being earmarked exclusively for the hospitality and related enterprises.
- CGTMSE scheme enhanced to facilitate additional credit of INR 2 trillion for MSMEs and expand employment opportunities.
- Raising and Accelerating MSME Performance (RAMP) programme with an outlay of INR 60 billion over five years to be rolled out to help the MSME sector become more resilient, competitive, and efficient.
Boost to MSMEs
- The emergency credit line guarantee scheme will be extended up to March 2023 and the guaranteed cover will be expanded by INR 500 billion to cover an amount of INR 5,000 billion.
- The Credit Guarantee Trust for Micro and Small Enterprises scheme will be revamped with required infusion of funds to facilitate additional credit of INR 2,000 billion for MSMEs and expand employment opportunities.
- Raising and accelerating the MSME performance programme with an outlay of INR 60 billion over a period of five years, will help the MSME sector become more resilient, competitive, and efficient.
“The Union Budget has opened up new innovative avenues for Indian MSMEs to explore and expand their horizons” quoted Arjun Bharadwaj, CEO of SolutionBuggy.
If you want to know more about the new manufacturing business opportunities or want assistance in gaining the benefit of government schemes, contact the experts of SolutionBuggy or register here.
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