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Saturday, February 27, 2021

BUDGET 2021-22: MSMEs feel let down, say allocation of Rs 15,700 crore inadequate

Input costs have gone up by around 60 per cent, which threw many small players out of the market. During her Budget speech, Sitharaman announced a reduction of 7.5 per cent in duty structure of steel. Further, the Budget revoked the anti-dumping duty and countervailing duty on "certain" steel products.

Written by Partha Sarthi Biswas | Pune |
Updated: February 1, 2021 10:24:59 pm
During her Budget speech, Finance Minister Nirmala Sitharaman announced provisions worth Rs 15,700 crore for the MSME sector. (Representational)

Small and medium industries have expressed disappointment with the Union Budget with many criticising the government for not taking serious note of the sector’s problems.

During her Budget speech, Finance Minister Nirmala Sitharaman announced provisions worth Rs 15,700 crore for the MSME sector. Sandeep Belsare, president of Pimpri-Chinchwad Small and Medium Scale Industries Association, called the allocation inadequate. “We are called the backbone of the industry, and when it comes to provision it’s not even 10 per cent,” he said.

Belsare said this provision would not meet the demands of the industries, and that rising cost of inputs in the form of steel, iron, copper and other metals had become a matter of grave concern for the sector. In fact, Transport Minister Nitin Gadkari took the unusual step of highlighting this to the Prime Minister, he added.

Input costs have gone up by around 60 per cent, which threw many small players out of the market. During her Budget speech, Sitharaman announced a reduction of 7.5 per cent in duty structure of steel. Further, the Budget revoked the anti-dumping duty and countervailing duty on “certain” steel products.

Belsare also said the lack of clarity on what was exempt made it difficult to understand the total effect of the exemption. “While input costs have increased by 60 per cent, reduction of a mere 7.5 per cent would not have much effect,” he said, adding that many in the sector had stopped catering to industries that did not take into account the increased cost of production. “We asked for a regulatory body to look at the price rise, but that also has not been announced,” he said.

The 73rd National Sample Survey estimated the total number of MSMEs in India to be at 633.88 lakh generating 11.10 crore jobs.

Chandrakant Salunkhe, chairman of SME Chamber of India, also said the Budget was not beneficial for the sector. “What we were looking for was a clear direction of growth in terms of reduction in interest rate, as well as easy availability of loans. But nothing was included in the speech,” he said, adding that the previous stimulus package was mostly in terms of loans so there was no real stimulus package offered.

Abhay Bhor, president of Forum of Small Scale Industries, claimed that the Budget had poured out incentives to poll-bound states, thereby neglecting Maharashtra. “We are highly disappointed with the Budget,” he said.

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