The Budget 2021 was a mixed bag of positives and addressal gaps. Here are some key takeaways for MSMEs in EXIM -
- The Budget earmarked ₹1.18 lakh crore for the Ministry of Road Transport and Highways providing 8,500 km and an additional 11,000 km of national highway corridors. This is expected to give a major (and a much needed) boost to the infrastructure of the country and support the industries providing inputs for infrastructure — which will eventually push India’s outwards shipments.
- It will lay groundwork to make exports competitive by reducing logistic overheads and cost of doing business.
- The rationalisation of GST and customs will make procuring raw materials and exporting cheaper and easier.
- The budget aimed at strengthening MSMEs by doubling the proposed capital expenditure in this sector to Rs 15,700 crore from Rs.7572 crore last year.
- The finance minister proposed the creation of a special framework for debt resolution for MSMEs.
- The implementation of the e-Courts system and a strengthened NCLT framework will make resolution of cases faster.
While these reforms will undoubtedly give MSMEs a boost in terms of exports, provisions in the following areas can further nurture growing businesses in India
- The government should allocate the funds for the Remission of Duties and Taxes on Exported Products (RoDTEP), Merchandise Exports from India Scheme (MEIS) and (Service Exports from India Scheme) SEIS so that exporters’ past claims can be released speedily as that has severely eroded their liquidity.
- There should be provisions to expedite the privatisation of the management of major ports to increase efficiency and there should be a policy to develop a National Shipping Line to take a major share of India’s exim trade.
- A scheme to promote flagging of merchant ships would result in reducing exporters’ shipping costs.
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