Tag MSME

MSMEs at the Centerstage of Budget 2024: The government has recognized the importance of MSMEs in addressing unemployment and rural distress. The budget for 2024-25 has given special attention to MSMEs, particularly labor-intensive manufacturing, through financing, regulatory changes, and technology support.

Improved Access to Credit: A new credit guarantee scheme has been introduced to facilitate term loans for MSMEs to purchase machinery and equipment without requiring collateral or third-party guarantees. This scheme supports MSMEs, especially those in the manufacturing sector, to access credit more easily.

Continued Bank Credit During Stress Periods: A new mechanism has been proposed to ensure MSMEs continue to receive bank credit during stress periods, even if they are in the special mention account (SMA) stage.

Enhanced Mudra Loan Limits: The limit for Mudra loans has been increased from ₹10 lakh to ₹20 lakh for entrepreneurs who have successfully repaid previous loans under the ‘Tarun’ category.

Improved Credit Assessment Models: Public sector banks are set to develop new credit assessment models based on the digital footprints of MSMEs, rather than relying solely on asset or turnover criteria.

Expansion of SIDBI Branches: The Small Industries Development Bank of India (SIDBI) will open 24 new branches this year to serve major MSME clusters.

Reduced Compliance Burden: The turnover threshold for mandatory onboarding on the Trade Receivables Discounting System (TReDS) platform has been reduced from ₹500 crore to ₹250 crore.

Energy Audit and Sustainability Initiatives: The budget has allocated financial support for conducting energy audits in 60 MSME clusters. This initiative aims to help clusters shift to cleaner energy sources.

Support for Food Processing and Export Sectors: Provisions have been made for setting up 50 multi-product food irradiation units and 100 quality testing labs with NABL accreditation, as well as the creation of e-commerce export hubs in public-private-partnership (PPP) mode.

These strategic measures are aimed at fostering growth and enhancing the competitiveness of MSMEs in India. The contribution of MSMEs to all-India manufacturing output in FY 22 was 35.4% and the share of MSME-made products in exports in FY 24 was 45.7%, this is only expected to grow. By 2028, India’s MSME sector is projected to contribute US$ 1 trillion to the nation’s overall exports, making up about 35% of the GDP.

1st July 2024: E-commerce has significantly enhanced MSME capabilities by offering global market access, reducing operational costs, and providing efficient tools for inventory management and payment processing. While e-commerce platforms have enabled MSMEs streamline their logistics and use digital marketing to enhance visibility and sales certain GST registration requirements have proved a limiter their growth and economic contributions. The Bengal Chamber of Commerce and Industry (BCC&I) hosted a session, titled ‘Seamless E-Commerce Platform Operation for Sellers and Compliance,’ where experts deliberated on the challenges faced by MSMEs in the e-commerce sector under the current GST regime and deliberated possibilities to enhance ease of doing business.

Sellers highlighted that many MSMEs find the registration procedure rigorous as it varies from state to state, with numerous applications being denied for reasons that at times appear unclear. They also highlighted that the current Principal Place of Business (PPOB) registration regulations, which mandates a brick and mortar set up to accommodate business operations, compulsory employee presence, specification on space dimension impose financial and operational burdens on MSMEs in an increasingly digital-oriented business environment. Sellers are also facing issues with biometric requirements, since they need to be physically present for verification, complicating remote or digital business operations. While appreciating contributions of the state government of West Bengal towards MSME’s platformed on e-commerce, the sellers urged support from the State of West Bengal in inclining the need of one home state PPOB registration with other States to provision Ease of Business based on their optimism of the state of west Bengal

During the session, experts praised the State of West Bengal government for embracing shared space model in respect of registration while exercising due caution. However, they emphasized the urgent need for broader acceptance and swift integration of the PPOB model for MSMEs. This model simplifies regulatory compliance, reduces administrative burdens, and streamlines operations for MSMEs in shared e-commerce spaces. Secondly, the PPOB model promotes resource sharing among MSMEs, enabling them to pool logistics, warehousing, and other essential services. Thirdly, by easing entry barriers and fostering a more supportive environment for MSMEs, the PPOB model can stimulate entrepreneurship and innovation. They also recommended that the government introduce digital invoicing to simplify GST compliance for MSMEs, helping reduce paperwork and errors, and enhance efficiency. They also called for clearer guidelines tailored to the unique nature of co-working spaces to address classification and taxation issues. Collaboration between retailers and tax authorities was highlighted as crucial for addressing concerns and establishing mutually agreeable solutions.

Sri Devi Prasad Karnam, Commissioner, State Tax, West Bengal, said “We have adopted a pragmatic approach to business registration that aligns with the realities of modern e-commerce. Our policy understands shared space and coupled with exercising due caution we endeavour to foster a more conducive environment for MSMEs and small sellers. We hope to see ease in compliance and more acceptance for MSMEs in the times to come across states. By doing so, we can collectively support our MSME sector, drive economic growth, and create a more competitive and inclusive business landscape across India.”

Speaking on this, Sri Debashis Bandyopadhyay, IAS, Special Secretary, Department of MSME & Textiles, Government of West Bengal said, “West Bengal stands at the forefront of India’s MSME landscape, hosting nearly 89 lakh units across manufacturing, trading, and other sectors. The state boasts over 29 lakh MSME entrepreneurs, constituting 32.7% of the nation’s MSME enterprises and providing employment to 1.36 crore individuals, prominently in manufacturing. The state government has catalyzed growth with initiatives like the expansion of the textile sector, easing monitored yet safe entrance norms to the State which showcases the state’s commitment towards supporting local industries and fostering MSME growth through strategic policies.”

New Delhi, June 11, 2024: The 2nd North India Garment Fair (NIGF 2024) organised by the Clothing Manufacturers Association of India (CMAI) commenced on Jun 11 till June 13, 2024, at the Yashobhoomi Convention Centre (IICC), Dwarka, New Delhi. NIGF 2024 features over 200 exhibitors showcasing a diverse array of menswear, womenswear, and kidswear.

The inauguration ceremony was graced by leading North India retailers, including Manik Jain & Sahil Jain of Aristocrat Garments, Bharat Bhushan Taneja of Paul Garments, R D Gupta of Bindals Group, Ranjit Surana of Bachoomal Collection, Sanjeev Garg of Stanmax, Mohinder Chaudhary and Saurabh Chaudhary of Suvidha Stores, Tarun Langer & Chander Shekhar Mahajan of Yougal Sons as Guests of Honour. Key dignitaries from CMAI present at the Inaugural included Rajesh Masand – President; Rohit Munjal – Vice President; Santosh Kataria, Chairman – NIGF; Rahul Mehta – Chief Mentor and Pankaj Jain – Hon. Secretary – North and other office bearers of CMAI.

Rajesh Masand, President, CMAI, expressed, “The Domestic Garment industry in India is poised for significant growth, driven by the country’s dynamic demographic and economic potential. NIGF 2024 is a testament to CMAI’s commitment to supporting MSMEs and enhancing the garment trade in North India. The upcoming festival season is a crucial period for the Garment industry and hence NIGF 2024 plays a pivotal role in connecting manufacturers with thousands of buyers ensuring they are well-prepared to meet market demands”.

At the Inauguration, Santosh Katariya, Chairman said, “NIGF 2024 has fast developed as a successful platform for Manufacturers from across the country. It offers North India’s Retail industry a fantastic opportunity to meet new Suppliers, new Brands and refresh their merchandise for customers from across India. For the benefit of Exhibitors, we have also organized a Business Networking Session tomorrow with leading Agents & Distributors from pan India”.

NIGF 2024 features a diverse array of garment manufacturers, with over 95% representing MSMEs from various parts of India, including key hubs like Mumbai, Surat, Jaipur, Bengaluru, Indore, Ludhiana, Uttar Pradesh, and the Delhi-NCR region. Retailers from across the country have pre-registered to visit the fair and expected to attend the fair.