Budget 2024: De-risk MSME Credit for Advanced Manufacturing Growth, says Deloitte India

New Delhi, Jan 6 (KNN) De-risking of credit inflows to MSMEs in the manufacturing sector is essential to promote capital investment and skill development. It is also crucial to develop the capability for advanced manufacturing of intermediary goods, stated, audit and consulting firm Deloitte India in its pre-budget expectation booklet.

Despite a 13.2 per cent credit growth for medium-sized industries in June 2023, a significant credit gap persists for MSMEs, especially in sectors like automotive, electronics, industrial machinery, and chemicals.

The firm also proposed that risk mitigation tools such as credit guarantees and insurance schemes should be promoted.

While the Credit Guarantee Scheme for Micro and Small Enterprises increased the credit limit to Rs 5 crore in April 2023, efforts are still needed to bridge the estimated Rs 20-25 lakh crore MSME credit gap.

Greater credit access to enhance MSMEs' capabilities in advanced manufacturing for segments like semiconductors, medical equipment, and industrial equipment is required to boost Manufacturing sector.

Additionally, the firm called for relief in Goods and Services Tax (GST) compliance for e-commerce businesses, seeking respite for exporters and e-commerce operators, particularly regarding the 1% tax collected at source (TCS) under section 52 of the CGST Act.

The firm also highlighted the necessity of addressing these issues to boost the formalization of credit access for MSMEs and support the growth of advanced manufacturing sectors. 

(KNN Bureau)