“Last year, I proposed extending the credit guarantee scheme for MSMEs. I am happy to announce that the revamped scheme will take effect from April 1, 2023, through an infusion of Rs 9,000 crore in the corpus,” the Finance Minister said in Parliament.
The announced infusion is expected to enable additional collateral-free guaranteed credit of Rs 2 lakh crore and reduce cost of credit by 1%, Sitharaman also said.
According to the Economic Survey 2022-23 tabled in Parliament on January 31, the recovery of India’s MSMEs was advancing swiftly. The Survey also said that the Emergency Credit Linked Guarantee Scheme (ECLGS) has offset the impact of the COVID-19 shock on these units through robust credit disbursement.
Quoting data from the National Credit Guarantee Trustee Corporation (NCGTC), the Survey said that as on November 30, 2022, 1.2 crore MSME units availed the ECLGS scheme and raised collateral-free resources to the tune of Rs 3.6 lakh crore. “A recent CIBIL report showed that 83% of the borrowers who availed of the ECLGS were micro-enterprises, and more than half of these borrowers had an exposure of less than Rs 10 lakh. The NPA rate in banks for the category of MSME borrowers who availed of ECLGS was lower than the category that did not avail of the scheme,” it said.
The Economic Survey had forecast that the economy could grow 6% to 6.8% year-on-year in financial year 2023-24, down from 7% projected for the current year. It also warned about the impact of a global slowdown on exports.
“India’s growth outlook seems better than in the pre-pandemic years, and the Indian economy is prepared to grow at its potential in the medium term,” the Survey said.This is Finance Minister Nirmala Sitharaman’s fifth straight budget. It will also be the last full budget of the second Modi government before the next parliamentary elections in 2024.
