Union Budget 2021: Key announcements for MSME sector
Union finance minister Nirmala Sitharaman on Monday made a provision of ₹15,700 crore for the Micro, Small and Medium Enterprises (MSME) sector in the Union Budget 2021-22. "We have taken a number of steps to support the MSME sector in this budget. I have provided ₹15,700 crore more than double the previous year," Sitharaman said during her budget speech in Parliament.
Sitharaman began the Budget 2021 presentation noting the severe consequences and impact of the coronavirus pandemic on the economy and the lives of the people. The finance minister mentioned the mid-year launched Aatmanirbhar Bharat mission that aims to make India self-reliant.
Here is the list of schemes launched for the MSME sector:
The highlight for the MSME sector is the increase in the proposed capital expenditure of this year. The finance minister has earmarked ₹15,700 crore for the MSME sector, which is double the capital expenditure prosed in the budget of 2020-2021.
The customs duty on semis, flat, and long products of non-alloy, alloy, and stainless steels for the benefit of the MSMEs hard hit by the coronavirus pandemic has been reduced to 7.5 per cent uniformly.
"To provide relief to metal recyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to March 31, 2022. Further, I am also revoking ADD and CVD on certain steel products," the minister said while presenting the budget.
For copper recyclers, the customs duty on copper scrap has been reduced to 2.5 per cent from 5 per cent.
For the textile industry and MSMEs in the textile industry nylon chain has been made in par to polyester and other artificial fabrics as part of rationalising duty on raw materials.
Duty on steel screws and plastic builder wares has been increased from 10 per cent to 15 per cent while on prawn feed it has increased to 15 per cent from 5 per cent.
To incentive exporters of garments, leather and handicraft items that are primarily made by MSMEs the budget has announced the withdrawal of exemptions on imports of some types of leathers as they are manufactured domestically in quality and quantity.
Custom duty on finished synthetic gemstones has also been increased to encourage its domestic processing.
The finance minister announced the creation of a special framework for MSMEs for debt resolution. To resolve cases faster, the NCLT framework will also be strengthened including the implementation of the e-Courts system, she said.