Union Budget 2022: MSME sector received the much needed spotlight
The Union Budget 2022 saw the MSME sector getting a much needed booster dose with a series of initiatives that will accelerate economic growth. The extension of Emergency Credit Line Guarantee Scheme (ECLGS) and the interlinking of Udyam, e-Shram, National Career Service (NCS), and Aatamanirbhar Skilled Employee Employer Mapping (ASEEM) portals is a positive move as it will enable ease of doing business in India which in turn will encourage entrepreneurship.
The extension of ECLGS up to March 2023 and its guarantee cover being expanded to 5 lakh crore will provide relief to MSMEs to mitigate the ongoing impact of pandemic. Moreover, Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme and RAMP programme will also support their revival through more and more employment opportunities.
Not limited to MSMEs, we also saw the tax incentives provided to startups have been extended till 2023 which is a positive move for existing start-ups and aspiring businesses. Another interesting take away from the budget is the focused attention towards local manufacturing for gems and jewellery, consumer electronics through duty reduction and incentivizing exports for handicrafts, textile and leather industry. In addition, the push towards enabling infrastructure on roads and transport which will certainly support growth for the retail and e-commerce industry.
However, overall there was a limited focus towards the retail sector specifically the segment of offline retailers which are reeling under a lot of stress due to ongoing pandemic. It is important to incentivize them to adopt digital solutions to ensure better business prospects and level playing capabilitiesto compete with big e-commerce entities. Moreover, digital infrastructure support will be important especially for MSME retailers since the future is getting more and more digitized, personalized, and connected. If we equip them from business disruption, it will contribute more to the economic development of the country I wish the government also accelerate its efforts towards providing digital infrastructure support for them so that they can also benefit from larger schemes of ongoing efforts.
Also, the government must accelerate its efforts to promote Open Network for Digital Commerce (ONDC) as it is going to be a game-changer in the e-commerce ecosystem, providing better reach for both consumers and sellers. The design to bring open and standard gateways will facilitate e-commerce platform providers to offer more features and easier customer onboarding. It will allow retailers to offer a rich and immersive shopping experience.
Some of the benefits that it will provide to retail tech players are mentioned below:
• Customer onboarding is going to be easy and seamless as all the underlying compliance related complexities – e-KYC, GST, etc. will be taken care by ONDC platform gateways.
• From an operations aspect, ONDC will provide a unified product catalog and network of suppliers, sellers, and buyers. This will enable retailers to refer to the products easily and will further help to identify and reach out to their stakeholders in an integrated manner.
• Since functions like payments, taxation, invoicing, etc. will be taken care by ONDC, the focus will be more on providing best in class shopping experiences and a highly immersive and collaborative user experience. Overall, this should result in a thriving e-commerce ecosystem with more suppliers, sellers, brand owners, and buyers joining the system.