The Union Budget 2022 has laid focus on infrastructure and the MSME sector, which accounts for 45% of India’s total manufacturing output, 40% of exports and almost 30% of the national GDP.

An amount of Rs 50,000 crore has been earmarked exclusively for the hospitality and related enterprises under the Emergency Credit Line Guarantee Scheme (ECLGS), launched to provide much-needed additional credit to micro, small and medium enterprises (MSMEs) and help them mitigate the adverse impact of the Covid-19 pandemic.

The government has also decided to extend the support to MSMEs through ECLGS till March 31, 2023. The earmarking of the credit guarantee support to the hospitality sector has increased the total cover under ECLGS to Rs 5 lakh crore.

In addition, the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds to facilitate additional credit of Rs 2 lakh crore.

In her budget speech, Finance Minister Nirmala Sitharaman said a Rs 6,000-crore programme to rate MSMEs will be rolled out over the next five years.

The Raising and Accelerating MSME Performance (RAMP) programme would improve the competitiveness and productivity of MSMEs, Sitharaman added.

In June 2021, the World Bank had approved $500 million for the programme while stating that it targeted improvements in the performance of 5,55,000 MSMEs. A year earlier, it had approved a $750 million MSME Emergency Response programme to support the fund flow to Covid-impacted MSMEs.

The MSME sector also got a boost for skilling and enhancing entrepreneurship, said Sitharaman, adding that the government intends to increase focus on formalisation.

MSME’s Udyam, e-Shram, NCS and Aseem portals would be interlinked and their scope widened, Sitharaman said.