New Delhi, Feb 1 (KNN) With UP and Punjab, the two agro based and agro focused states on poll; Government shifts its stress in budget to rural development.

With the stress given by the Government on ‘Make in India’ and ‘Ease of doing business’, the industrial sector particularly the MSME sector was expecting some sweeping reform announcements in the budget.

The expected reforms were in labour laws, simpler environmental measures and some respite from the SARFAESI and other loan recovery system.

But it appears the election mode of the Government has compelled larger allocation to MNREGA and other rural focused schemes, where the allocation for the sector has been increased by nearly 25%.

However, the reduction in tax rates for small companies is a welcome step. This wills more MSMEs to corporatize, an avenue to enhance equity financing.

The incentive to small business to move cashless by reducing the presumptive tax rate is another welcome step.

With the Banks flush with cash, thanks to the demonetisation, the MSME sector was particularly waiting for some holidays in loan recoveries and a special kitty to support the really distressed sectors.

However, in the budget speech, the phrases ‘Make in India’ and ‘Ease of Doing Business’ were probably used only once.

Labour reform is another area where the MSMEs were eagerly looking for some respites, at least from the EPF and ESI Acts, as announced by Jaitley in his previous budget.

But this time he only mentioned about clubbing of Labour Act, which is a difficult task with a belligerent trade union lobby.

Overall the MSMEs probably have got a distant consolation prize by just a mention that they are the largest employment creator. (KNN/ DB)