The micro, small and medium enterprises (MSME) sector has posted smart recovery from pandemic-induced shock, with the goods and services tax (GST) paid by the sector in fiscal year 2022 exceeding the pre-pandemic level in FY20, the Economic Survey tabled in parliament on Tuesday noted. Despite a difficult economic environment, the sector demonstrated resilience as Centre took numerous cushioning steps to improve access to market and credit, it read.
The data from the 2023 survey shows that Goods and Services Tax paid by Micro, Small & Medium Enterprises increased to Rs. 5.5 lakh crore in FY22 from Rs. 5 lakh crore in FY20, which even came down to about Rs. 4.7 lakh crore in FY21.
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Economic survey highlighted Covid had a significant negative impact on the sector’s performance. “While the contribution of the MSME sector to overall Gross value added (GVA) rose from 29.3 per cent in FY18 to 30.5 per cent in FY20, the economic impact of the pandemic caused the sector’s share to fall to 26.8 per cent in FY21,” it said adding that MSME contribution to the manufacturing sector’s GVA also marginally fell to 36.0 per cent in FY21.
Now that the Economic Survey 2022-23 paints a positive picture for the sector, Budget 2023 will be closely watched to see Centre’s outlook for the sector. Hindustan Times spoke to industry experts to know their expectations from the upcoming budget.
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“The good news is that the post COVID economic revival in India has been robust and momentum is building. Much of this growth can be attributed to surge in private consumption, higher capex, firming up of corporate balance sheet, credit growth to small businesses (30.5% rise in between January and November, 2022) and return of migrant workers to cities and towns”, Rohit Arora, co-founder and chief executive officer, Biz2credit and Biz2X, said.
Sheetal Bhalerao, chairman, and managing director, Wardwizard Food and Beverages Ltd,”The upcoming budget for FY23-24 is expected to provide measures that will make doing business in India easier, especially for the MSMEs. We anticipate greater support for these MSMEs, as they are the backbone of the Indian economy and their growth will create jobs and promote innovation”.
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According to Rakesh Kaul, executive director and CEO of Clix Capital, NBFCs have played an important role in making credit available to small businesses in India, allowing them to grow and scale. Given that MSMEs account for one-third of the country’s GDP, 48% of exports, and create 111 million jobs, he says, the government must protect their interests. “This is absolutely indispensable if India aims to become a $5 trillion economy by 2025.”