Amid the Union Budget 2023-24, Finance Minister Nirmala Sitharaman on Wednesday revamped the credit guarantee scheme with Rs 9,000 crore in the corpus for micro, small and medium enterprises (MSMEs).

Last year, the central government proposed revamping the credit guarantee scheme for MSMEs. 

Saahil Goel, Co-founder and CEO, Shiprocket said, "To make the USD 5 trillion GDP dream a reality, doubling down on digital infrastructure is vital. Hence, the budget should be centred around digitization initiatives that empower the MSME sector. The impact generated would be felt in the improved urban and rural mobility as we see more ports, roads, airports and other infrastructure developing. This will culminate in reducing logistics costs - from roughly 13-14 per cent of the GDP to 8%. The eventual target would be to mark India’s presence in the top 25 countries with the best Logistics Performance Index(LPI)."

Finance Minister Nirmala Sitharaman announced a slew of measures to enhance the ease of doing business. “More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised. For furthering trust-based governance, we have introduced the Jan Vishwas Bill to amend 42 central acts,” she said.

While presenting the Union Budget 2023-2024 in Parliament, she said, "I am happy to announce that the revamped scheme will take effect from 1 April 2023 through the infusion of Rs 9,000 crore in the corpus."

She added that this will enable additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit will be reduced by about 1 per cent.

While sharing his take on budget announcements, Nitya Sharma, CEO and Co-founder, Simpl, "We welcome the budget for providing much-needed impetus to the country’s startup ecosystem. Announcements such as the extension of the date of incorporation for income tax benefits to start-ups from 31st March 2023 to 31st March 2024 and the provision of providing the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years, are truly great moves. Moreover, the government has also deducted a whopping 39,000 compliances that MSMEs needed to abide by and decriminalised over 3,400 legal provisions." 

Such steps will play an instrumental role in ensuring the ease of doing business in the country. Entrepreneurship is the very backbone of India’s economic development. Therefore, the measures suggested in the recently unveiled economic survey, such as capital gains tax regimes like those of Singapore and the UAE and capital flow procedures similar to those in countries like the US and Singapore, to accelerate the reverse-flipping of startups back to Indian shores, are vital moves.