Soon, the Indian state your MSME belongs to will be ranked in 1st, 2nd or 3rd place!
Why? The Government plans to boost MSME growth with a unique strategy – a state ranking system.
Both the Government and MSMEs are facing new challenges, due to the slow and quickly down spinning economy.
- 1 Government criteria for states ranking system
- 2 Other Government initiatives to Boost MSME Growth post-budget
Government criteria for states ranking system
MSME Secretary AK Panda stated that the ranking system will be based on 4 main categories (the 4 E’s) –
There are existing MSME schemes from state and central governments to allow the SME sector to avail affordable loans to hire labour to expand business operations.
State Governments must ensure that small businesses have not just the funds, but the access to raw material, infrastructure and tools to set up a business from scratch.
MSMEs contribute to over 45% of the country’s exports, however, only 33,000 MSMEs are registered export businesses. The ministry is developing a platform to provide a consolidated database of export-related information for the MSME sector – a global market intelligence system of sorts.*
Ease of doing business
State Governments should assist businesses with operations – through the ease of access to credit. MSMEs contribute to around 20% of the GDP, and the Government wants to implement schemes to boost credit for the sector.
Other Government initiatives to Boost MSME Growth post-budget
Improving GST in India
Despite easing rules for GST for businesses, the Government recorded GST collections in February at about Rs. 1.05 Lakh Crore – a significant drop from their targeted Rs. 1.15 Lakh crore.
AK Panda stated that MSMEs are increasingly registering on the GST network to bring themselves into the formal sector. The sector accounts for the maximum number of registered businesses on GSTN. With a closer control of allowing MSMEs to claim for Input Tax Credit and easing GST return filing, the Government wants to help MSMEs avail benefits through the GST system.
*New Logistics Policy:
The Government introduced a new logistics policy in the budget to boost business for the sector and make it more competitive. Launched by Finance Minister Nirmala Sithraman post the budget, the National Logistics Policy is set to create a single window e-logistics market.
Government App for Bank Loan Rejection
A new Government app is in the works to allow small businesses (or any business) register a complaint if a bank rejects a loan without a valid reason. The Government wants to identify reasons businesses are denied loans and help correct them.
App-based invoice financing for MSMEs:
To ensure the MSME sector has enough funds available for operations, the Government has proposed to launch an app-based invoice financing loan product that could help small businesses with their cash flow problems.
Besides these schemes, the Government also provided:
- Platforms to deal with delayed payments from vendors
- Extended debt restructuring scheme (revising a bad loan) up to 2021 and;
- Eased interest on late GST payments.
Will your state step up their game and boost MSME growth? What has your state done to help your business? Let us know in comments.