Government proposes new payments portal for MSMEs in budget

By

Isabelle Crossley

Published
Jul 5, 2019

Micro, small, and medium enterprises could get their own payments portal as part of the new government budget, in a move to ease loan accessibility for the sector and enable it to grow. 

As the Narendra Modi government presents its first annual budget of the National Democratic Alliance government's second term (for 2019/2020) on July 5, the Minister of Finance Nirmala Sitharaman has proposed further measures to promote MSMEs. Sitharaman told parliament that the government is considering setting up a payments portal specifically for MSMEs, which would allow all bills and payments to be taken care of on the one portal.

"Government payments to suppliers and contractors are a major source of cash flow especially to MSMEs,” said Sitharaman to parliament, as reported by the Economic Times. “Investment in MSMEs will receive a big boost if delays in payments are eliminated."

Sitharaman also said that the government plans to allocate Rs 350 crore ($52.6 million) under the interest subvention scheme for two percent interest subvention offered to all goods and services tax registered MSMEs in the current year on all fresh and incremental loans. Pension benefits are also set to be offered to around three crore shop owners whose annual turnover is under Rs 1.5 crore under the new Pradhan Mantri Man Dhan scheme.

The government has proposed a number of incentives and programmes aimed at MSMEs as part of its drive to grow the country’s economy as a whole. The MSME Minister has also proposed the creation of an e-commerce platform for MSMEs that will promote their goods internationally.

Many of India’s fashion, textiles, and accessories businesses are MSMEs, as are many artisanal workshops and so any incentives for the MSME sector will have a big effect on India’s wider fashion industry.