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The Union Budget has been declared, raising hopes and expectations for some industries, while others battle it out to put behind the year and look from a fresh business perspective. The MSMEs industry has been hit hard owing to the nationwide lockdown situation as the global supply chain was disturbed due to the COVID crisis.

The contribution of MSMEs to the Indian export market is over 40%; thus, it’s important to have sustainable strategies in place to improve the situation pertaining to international commerce. The authorities are expected to consider tariff charges and assist small and medium enterprises with upgrade plans, including the technological aspect of it. It could be vital to enhancing the small industries’ competitiveness in the global market.

Looking from the macro degree angle, it’s evident that the MSME industry may take time to restore the demand and supply factor and further wants clarity on financial restoration. Policymakers are wanting to curb inflation, the runaway cost, and the fiscal deficit. Retail inflation has slowed down due to the falling cost; however, the development in terms of capital contraction looks slow, making the restoration process slow. It’s interesting to see if the finance minister put efforts to provide stern measures to assist development.

Talking about the digital fund’s framework, it’s relevant to understand the availability of credit scores. For large business enterprises, it’s sure to be beneficial with digital payments are now accepted at large. However, it’s vital to understand if the government will be able to supply MSMEs with simpler entry to credit score to boost MSME credit ratings.

Analyzing the past 12 months, the authorities have been able to provide MSMEs with a moratorium on loans of 3 months, alongside fewer tax relaxations. But the pandemic-induced lockdown has affected the MSME industry, making it relevant for the authorities to re-consider the benefits provided and extend such relaxations into the coming 12 months. With the slowdown of productions due to the unavailability of laborers, MSMEs are finding it difficult to pace up in the market. This brings to the fore the demand for change in working capital necessities as they’re likely to change and should be reassessed.

The finance minister can lend a helping hand to MSMEs by monitoring the monetary system and providing simpler entry to MSME credit rating.

It’s also important to understand the labor pressure points and how labor scarcity affected the MSMEs at large. During the initial lockdown phase, migrant employees, especially laborers started to migrate from big cities to their hometowns. Just as things began to normalize, we saw reverse migration, and migrants found employment as loaders, drivers, and building laborers.

This has persistently created a large gap in the workforce, making it difficult for MSMEs to commence operations again. The government can rule out some employment possibilities for such employees to return to their jobs, which seems to be a helpful step in normalizing the work process for small and medium enterprises.