Taking cognisance of the way Micro, Small and Medium Enterprises (MSMEs) have posted smart recovery from the pandemic, the Economic Survey 2022-23 said that GST trends reflected this in good measure. “The recovery of the MSME sector from the pandemic-induced shock is evident in the trend in GST paid by MSME units. The GST paid by the sector in FY22 has crossed the pre-pandemic level in FY20,” the Survey tabled on Tuesday noted.
Explaining how the pandemic affected the sector’s performance, the Survey highlighted that while the contribution of the MSME sector to overall GVA rose from 29.3 per cent in FY18 to 30.5 per cent in FY20, the economic impact of the pandemic caused the sector’s share to fall to 26.8 per cent in FY21. MSME contribution to the manufacturing sector’s GVA also marginally fell to 36.0 per cent in FY21.
Nevertheless, resilience was exhibited by the sector despite a tough economic environment. Observing how the government has taken multiple steps to cushion the economic impact of the pandemic on MSMEs, the Survey said that the AtmaNirbhar Bharat package has extended adequate support to their ilk. “Some of the measures undertaken include the modification of the definition of MSMEs; the provision of Rs 20,000 crore subordinate debt for stressed MSMEs, Rs 50,000 crore equity infusion through Self Reliant India fund; the waiving of the global tender requirement for procurement of up to Rs 200 crore; launching of the Udyam portal for MSME registration, a paperless, zero-cost registration portal that is based on self-declaration and only requires Aadhaar,” it stated.
In order to fast-track the process, the Survey noted, the government has instructed Central Public Sector Enterprises (CPSEs) and all companies with a turnover of Rs 200 crore or more to get themselves onboarded on the Trade Receivables Discounting System (TReDS) platform for facilitating the discounting of trade receivables of MSMEs through multiple financiers.
Talking about how access of MSMEs to market and credit has improved, the Survey highlighted that the government has initiated the ‘Raising and Accelerating MSME Performance’ scheme (RAMP) in FY23. “The World Bank-supported scheme aims at strengthening institutions and governance at the Centre and State, improving Centre-State linkages and partnerships and improving access of MSMEs to market and credit, technology upgradation and addressing issues of delayed payments and greening of MSMEs. The RAMP programme will be implemented over a period of five years,” it said.
The total outlay for the scheme is Rs 6,062.4 crore, out of which Rs 3750 crore would be a loan from the World Bank, and the Government of India would fund the remaining Rs 2312.4 crore, as per the survey document.
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