Ministry of MSME gets the highest hike in budget allocation

New Delhi, Feb 1 (KNN) The allocation to the Ministry of MSME, the nodal ministry for the 5 crore plus MSMEs, is miniscule when compared with the many other big Ministries.

However, the ‘David’ of the Government apparatus has pulled a big surprise this year against the bigger goliaths.

Leading voices of the MSME sector has congratulated the Minister(s) and senior officers of the Ministry in achieving this feat.

The budget of the Ministry has been increased by nearly 87% over the budget allocation for the previous year 2016-17.

Allocations of Important Ministries, Sectors and Vulnerable Sections, has been given as an annexure to the Finance Minister’s budget speech.

It shows the Ministry of MSME has got the highest increase in allocation of Rs. 6482 crores vis – a vis the budget allocation for the previous year of Rs. 3465 crore.

While the head wise details of the allocation are not readily available, knowledgeable sources indicate the hike has been given mainly in contribution to the Credit Guarantee scheme.

In his new year speech the Prime Minister had announced increase in the corpus of the Credit Guarantee scheme to Rs. 7500 crore of which Government will be contribute about Rs, 5000 crore.

It appears this year Rs. 2000 crore has been earmarked for recapitalisation of the Trust operating the Guarantee scheme.

Under the credit guarantee scheme, collateral free loans upto Rs. 1 crore are guaranteed by the Trust.

PM Modi in his New Year speech also announced hiking the loan limit to Rs. 2 crore under the guarantee scheme also.

The intervention will provide a big respite to small MSMEs who find it difficult to meet the increasing collateral demands of the Banks.

However, KNN team has learnt that the necessary notification is yet to reach the Banks to implement the Prime Minister’s announcement. (KNN/ DB)