The Covid-19 outbreak has derailed the financial stability of all the major economies. India is not different from them. The world’s second largest country has also experienced the heat of instability. It has executed various innovative policies in order to recover from the crisis.The Union Budget 2022 proves that the country is very keen to improve its economic condition and is willing to go to any extend to achieve the same.What makes the budget special is how it views the MSME sector of the country and what it offers for the sector.
Planning makes difference
Enormous effort may have been put for planning. The depth can be red from the budget itself. It is the reason why many have termed it as a well-planned budget.Definitely, Indian Finance Minister Nirmala Sitharaman and the finance department, especially the brilliant minds who have worked tirelessly and dedicatedly to bring out this extra-ordinary document, deserves special appreciation, and must be offered a dignified position in our memories.
Primarily, the budget document speaks of three important goals: focus on growth and all inclusive welfare; promoting technology enabled development, energy transition and climate action; and virtuous cycle starting from private investment, crowded in by public capital investment.Apart from the goals, there are clear indications in the budget about its priority areas. The document indicates at least four areas: PM GatiShakti (the one which deals with transport and connectivity); inclusive development; productivity enhancement and investment, sunrise opportunities, energy transition and climate action; and financing of investments.
The secret that lies underneath
The priorities and focus points are crystal clear. These points can be easily red from the document. There is no doubt on towards which direction the country is being led and on what basis that direction has been chosen.Sustainable development, technology, infrastructure, public investment and MSME are the five points that can be extracted from the document.Undoubtedly, the Indian government considers the Micro, Small and Media Enterprises sector as its growth engine. It is preparing to mitigate the challenges, such as transport and connectivity, capital and technology, which the sector is going through at this juncture.
The government, it seems, believes that if right conditions are offered, the MSME can live up to its expectation and function as the driving force of its growth.Clearly speaking, the government aims to fill the vacuum created due to the lack of enthusiasm showed by the big corporates to push in more funds to the economy, with its aggressive investment for the growth and betterment of the MSME sector.
Important to recognise the change in focus
The change in focus indicated in the budget is expected to reflect soon in the country’s economic platform.For those companies handling technology, it is a great opportunity. They can join the government along with the MSME sector to lead the country towards the highest peak of prosperity.Generally speaking, the success of a MSME depends primarily on how optimally it uses its resources. Technology can ensure a MSME pays complete justice to its commitment towards optimal usage.The Indian government is very sincere about embracing technology. From agriculture, education and banking to health, in almost all the major areas, the country’s technological ambition is visible.The Indian MSME sector is also likely to follow the same footprint, as the government approach indirectly encourages them to do so.
Transformation to a ‘techno-budget’
One of the main attractions of the budget 2022 is that it discusses several technology-based policies and projects. As per the budget document, agriculture, health, education and banking are the prime areas the said policies concentrates.In the sector of agriculture, delivery of digital and hi-tech products and services to farmer in Public and Private Partnership model, and use of Kisan Drones to support farmers are the two main policies. The stress given to the concept of PPP indicates that the government expects that the tech companies would come in to collaborate with them to carry out the policy.
In education, creating high quality education contents, introducing virtual labs and skilling e-labs, establishing a digital university and launching Digital Ecosystem for Skilling and Livelihood program are the important policies discussed.In health, launching National Digital Health Ecosystem and National Tele Mental Health Programme is the crucial policy.Likewise, in the area of banking, digital banking by post offices, establishing at least 75 digital banking units by scheduled commercial banks in around 75 districts, and launching of Digital Rupee by Reserve Bank Of India are the prime policies or projects.
The future is MSME
It seems that the Indian government has recognised a bitter fact that it can no longer ignore the MSME sector and it is almost impossible to achieve its growth ambition by ignoring the sector, especially the challenges faced by the sector, from connectivity and capital to technology.The Budget 2022 clearly shows the change in approach. It proves the country is very serious about uplifting the MSME sector and is ready to do anything and everything to achieve the said target.
The budget hints the presence of a Keynesian strategy. The policy advocating the intervention of the government to fight the reluctance of the private sector, especially the corporate giants, to spend in the economy, almost proves the assumption right.Generally, in an economy, where this Keynesian policy is implemented, the government spends more to spur employment opportunities and growth. It is usually applied when the private sector shows reluctance to spend in the economy.In the Indian scenario, the MSME sector, it seems, is the biggest beneficiary. The buget also supports the said argument.
At least four key points is discussed in the budget specifically for the MSME sector. They are interlinking various portals, extending Emerging Credit Line Guarantee Scheme with focus on hospitality and other major MSME sectors, restructuring Credit Guarantee Fund Trust For Micro, Small and Medium Enterprises, and strengthening Raising And Accelerating MSME Performance program.
This is not just the story of a rapidly developing Asian country. It is the story of a country which is likely to become one of the leading economic powers in the world. For that reason, the action and the shift in the strategy is likely to rewrite the way the entire world handles the sector of SME.