{"id":62701,"date":"2025-12-27T17:56:55","date_gmt":"2025-12-27T12:26:55","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=62701"},"modified":"2025-12-27T18:03:32","modified_gmt":"2025-12-27T12:33:32","slug":"msme-demands-budget-2026-27","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/27-12-2025\/msme-demands-budget-2026-27","title":{"rendered":"MSME Demands Ahead of 2026-27 Budget"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ahead of the Union Budget 2026\u201327, representatives of MSME have flagged rising industrial stress and sought targeted reforms in credit access, risk protection, and compliance norms.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are MSMEs?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>MSMEs or Micro, Small, and Medium Enterprises are businesses that are defined by their <strong>investment and turnover levels.\u00a0<\/strong><\/li>\n\n\n\n<li>They are considered an important sector of the economy as they create jobs, generate income, and promote entrepreneurship.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"283a4a\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"934\" height=\"527\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-141.png\" alt=\"MSMEs\" class=\"not-transparent wp-image-62703\" style=\"--dominant-color: #283a4a; aspect-ratio:1.7723271684304223;width:396px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-141.png 934w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-141-300x169.png 300w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-141-768x433.png 768w\" sizes=\"auto, (max-width: 934px) 100vw, 934px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Contribution of MSMEs<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Contribution in Economy: <\/strong>MSMEs are often called the backbone of the Indian economy; they account for more than 11 crore jobs and contribute around <strong>27% of India&#8217;s GDP.\u00a0<\/strong><\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-dominant-color=\"e9e8ec\" data-has-transparency=\"false\" style=\"--dominant-color: #e9e8ec;\" loading=\"lazy\" decoding=\"async\" width=\"495\" height=\"304\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-140.png\" alt=\"\" class=\"not-transparent wp-image-62702\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-140.png 495w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-140-300x184.png 300w\" sizes=\"auto, (max-width: 495px) 100vw, 495px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Employment Generation:<\/strong> The sector consists of around 6.4 crore MSMEs , with 1.5 crore of them registered on the Udyam portal and employs around <strong>23% of the Indian labor force<\/strong>, making it the <strong>second-largest employer in India after agriculture.\u00a0<\/strong><\/li>\n\n\n\n<li><strong>Output and Exports: <\/strong>They account for <strong>38.4% of the total manufacturing<\/strong> output and contribute<strong> 45.03% of the country&#8217;s total exports.<\/strong>\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges faced by MSMEs in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Access to Finance:<\/strong> MSMEs struggle to secure capital due to a lack of collateral, limited credit history, or inadequate access to formal financial institutions.<\/li>\n\n\n\n<li><strong>Increased Competition:<\/strong> MSMEs face stiff competition from larger, more established companies that have greater resources and market influence.<\/li>\n\n\n\n<li><strong>Lack of Technological knowledge: <\/strong>Many MSMEs lack the technical expertise needed to modernize their operations, adopt new technologies, and stay competitive in the market.<\/li>\n\n\n\n<li><strong>Marketing and Networking Opportunities:<\/strong> Limited resources and networks prevent MSMEs from effectively marketing their products and services.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Demands of MSMEs<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Affordable Credit Access: <\/strong>Statutory collateral-free lending up to <strong>\u20b91 crore<\/strong> for micro enterprises and interest rate cap of <strong>6\u20137 percent<\/strong> on such loans to ensure affordability.<\/li>\n\n\n\n<li><strong>Protection Against Trade Shocks: <\/strong>Establishment of an <strong>Export Risk Equalisation Fund<\/strong> to compensate micro exporters affected by sudden tariff hikes.<\/li>\n\n\n\n<li><strong>Safeguards from Exchange Rate Volatility:<\/strong> Introduction of a forex fluctuation protection scheme for micro enterprises with limited hedging capacity.\n<ul class=\"wp-block-list\">\n<li>Simplified and subsidised foreign exchange hedging instruments to be considered by the Reserve Bank of India for micro units.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Simplification of Compliance:<\/strong> Higher exemption thresholds under the Goods and Services Tax (GST) regime for micro enterprises.\n<ul class=\"wp-block-list\">\n<li>Introduction of a single, simplified GST return for micro units.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Creation of an Emergency Working Capital Window <\/strong>during wars or global disruptions affecting raw materials, fuel, and shipping routes.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Government initiatives to promote the MSME sector<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>MSME Champions scheme: <\/strong>The objective of the scheme is to modernize MSMEs\u2019 manufacturing processes, reduce wastages, encourage innovativeness, sharpen business competitiveness and facilitate their National and Global reach and excellence.<\/li>\n\n\n\n<li><strong>Udyam Registration:<\/strong> It is an online registration process to simplify the registration of MSMEs. The objective is to provide MSMEs with a streamlined process to avail themselves of various benefits and incentives offered by the government.\u00a0<\/li>\n\n\n\n<li><strong>Section 15 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006,<\/strong> and newly enacted <strong>Section 43B(h) of the Income-tax Act<\/strong> says that businesses must pay these MSME Registered Enterprises within 15 days, or up to 45 days if they have an agreement.<\/li>\n\n\n\n<li><strong>Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):<\/strong> This scheme provides collateral-free credit to micro and small enterprises through a credit guarantee mechanism.<\/li>\n\n\n\n<li><strong>Scheme of Fund for Regeneration of Traditional Industries (SFURTI)<\/strong> was launched in 2005-06 to organise traditional artisans into clusters for improved competitiveness, product development and sustainable income generation.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>MSMEs are revolutionising India\u2019s growth story by driving innovation, generating employment, and empowering local communities.\u00a0<\/li>\n\n\n\n<li>Addressing MSME concerns through targeted credit support, s and simplified compliance can strengthen enterprise resilience, protect employment, and reinforce India\u2019s manufacturing and export ecosystem.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/ahead-of-2026-27-budget-msmes-seek-better-credit-access-safeguards-against-exchange-rate-risks-tariff-shocks-104405\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Context<\/strong><\/p>\n<li class=\"ms-5\">Ahead of the Union Budget 2026\u201327, representatives of MSME have flagged rising industrial stress and sought targeted reforms in credit access, risk protection, and compliance norms.<\/li>\n<p><\/p>\n<p><strong>What are MSMEs?<\/strong><\/p>\n<li class=\"ms-5\">MSMEs or Micro, Small, and Medium Enterprises are businesses that are defined by their investment and turnover levels.\u00a0<\/li>\n<li class=\"ms-5\">They are considered an important sector of the economy as they create jobs, generate income, and promote entrepreneurship.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/27-12-2025\/msme-demands-budget-2026-27\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-62701","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/62701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=62701"}],"version-history":[{"count":4,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/62701\/revisions"}],"predecessor-version":[{"id":62707,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/62701\/revisions\/62707"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=62701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=62701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=62701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}