The ‘all-time high’ claim can be misleading to the people because it conceals the fact that the growth of MSME GVA has been sharply declining since 2012-13 when it was 15.27 per cent. The latest data available with the Central Statistics Office (CSO) shows that the growth rate declined to 7.62 per cent at the end of March 2016 per cent of the GDP. When we consider it in the backdrop of the widening of the domain of this sector across sectors of the economy producing diverse range of products and services the relative growth of each individual sector, it is clear that all of them are declining. The trend aggravated more sharply after demonetization and introduction of GST.

The ‘all-time high’ claim has also been made regarding the flagship scheme for employment generation, namely Prime Minister Employment Generation Programme (PMEGP) for which an allocation of Rs.2327 crore is made for the year 2019-20. But what about performance of the scheme? Only a little over 26,000 enterprises were benefited by March 2018, but about 40 lakh people have already registered for their new enterprises by December, 2017.

The Budget has reiterated the Government’s focus on creation of sustainable employment in the non-farm MSMEs, but they are hollow promises and announcement which does not cater to the real needs of the survival of this sector. We can give example of the Trade Related Entrepreneurship Assistance And Development Scheme For Women, which was among the 22 flagship programme under the Ministry of MSME, and was launched by the government with a great fanfare. However, the scheme itself was wounded up during 2017-18. The lure of the big announcement was thus reduced to cipher.

The performance of other 21 schemes are also not very encouraging though the announcements were big and attractive. The number of beneficiaries are too small to make any considerable impact on the whole. The latest annual report shows that under Marketing Assistance Scheme the number of beneficiaries were only 334 and Credit Linked Capital Subsidy Scheme benefited only 4081. These are but only examples to show how the government’s efforts are too small compared to the the 133 crore population of the country.

To provide funding for the 2% interest rebate on incremental loan up to Rs.1 Crore for GST-registered MSME units, the budget of Rs. 350 crore has been provided under ‘Interest Subvention Scheme for Incremental Credit to MSMEs’. However, government is still in the process of implementing the last budget’s announcements regarding the GST mechanism. Among the achievement of the government Piyush Goel said that Working Group has been constituted to decide the policy guidelines on flow-based lending using GSTN to MSMEs through Fintech Companies. For ensuring credit support, capital and interest subsidy, the Government is clearing all pending liabilities under Credit Guarantee Scheme (CGT-MSE) and Credit Linked Capital Subsidy Scheme (CLCSS). This year already Rs. 311.00 Crore have been released to the Credit Guarantee Trust for MSEs and Rs. 941.76 Crore have released to the concerned Banks / FIs for clearing the liabilities of the CSCSS. Government is exploring the possibility of data sharing from GSTN for enabling reducing delays in sanction of credit to MSMEs.

Under the recent announcements made on 2nd November 2018, encompassing multiple initiatives and interventions for the MSME sector, 20 large and 100 small Technology Centres are going to be set up with a support of Rs.6000 Crore. This Budget has made allocation for this initiative, it was said. It is again a promise regarding which the Government’s track record makes us apprehensive. It is worth mentioning that the earlier announced 15 technology centres are still under development and the progress is very slow.

For setting up clusters in the manufacturing and artisan sectors, Rs.450 crore has been allocated. Allocation under National SCST-Hub has been increased. Mission Solar Charkha has been launched in the current financial year, for which Rs.143 crore has been allocated under the BE 2019-20. The scheme envisages setting up production clusters, each employing 2000 youth in the rural area, at least 50% of which would be women.

There are also several other announcements but on the whole, the Budget 2019-20 cannot reverse the MSMEs on the path of their survival in near future. The dead, dying, and grievously suffering smaller units are almost left to survive on their own. The only major thing this government has achieved is the redefining of the MSMEs in February 2018. The old investment based classification was done away with the new turnover based classification. The same turnover based criteria have been applied for all types of MSMEs including those operating in service sector.

The upper limit for micro, small, and medium enterprises were raised from 25 lakh, 5 crore and 10 crore rupees to 5 crore, 75 crore, and 250 crore. It was done only to make a rosy picture of the data as alleged by the opposition which was also indirectly admitted by one of the statements in the Budget 2019-20 on implementation of the budget announcement of the FY-2018-19 which had provided only 3794 crore to MSME sector for giving credit support, capital and interest subsidy and innovation.

Logically, the budgetary provisions should have been more in the backdrop of the redefinition with the upper limit considerably enhanced. The another achievement as mentioned by Piyush Goyal is the “Massive formalization of the businesses of MSMEs in the country after demonetization and introduction of GST. This is generating enormous financial information database of MSMEs’ businesses and finances. This big data base will be used for improving financing of MSMEs’ capital requirement, including working capital.”

Out of about 634 lakh registered MSME units in the country only 4000 enterprises are large. Lakhs of them are now not in operation. The sector gives employment to about 12 crore people. About 60 per cent of the enterprises are in the rural areas and 40 per cent in the urban areas. About 20 per cent of the units are run by women, 50 per cent are run by OBCs, 4 per cent by STs, 33 per cent by General, and 13 per cent by SCs. The top ten states which were harmed most by the policy experiments of the government are Uttar Pradesh, West Bengal, Tamil Nadu, Maharashtra, Karnataka, Bihar, Andhra Pradesh, Gujarat, Rajasthan and Madhya Pradesh. The horrible condition thus impacts mainly the rural people, women, SCs, STs, and OBCs which is certainly going to adversely affect the political fortunes of the BJP in the Lok Sabha elections of 2019. (IPA Service)