Budget 2023 announcements for MSME rejuvenation generates hope for revival of sick units

February 02, 2023 10:17 pm | Updated 10:17 pm IST

TIRUCHI: A number of MSME units in Tiruchi region that had to suspend operations and those that had gone sick due to a combination of factors including unfavourable market conditions, COVID lockdown impact and rise in input costs, are awaiting more information on the provision in the Union Budget for return of 95 percent of penalty amount on the units for failure to execute contracts during COVID.

As per the announcement, the forfeited amount will be returned by the government and the government undertakings to the MSMEs they were working with, under the Government’s Vivad Se Viswas scheme, a voluntary initiative for resolving pending direct tax disputes amicably with the tax payers.

MSME units that have lost their capacity for institutional financing and have their capital blocked are understood to be awaiting for more information on this measure.

In Tiruchi region, at least 35 units have been categorised as sick, and up to 25 units could be revived with a measure of capital infusion, according to the industry associations.

“We look for more information on the announcement on return of penalty amount and whether it would help in revival of sick units,” president of BHEL Small Industries Association Rajappa Rajkumar said, adding that the MSME associations had, in fact, mooted creation of a separate fund for the purpose of reviving sick units. But, the demand went unanswered.

Announcement on infusion of ₹9,000 corpus for a revamped credit guarantee scheme, the promised additional collateral-free guaranteed credit of ₹2 lakh crore, and one percent reduction in cost of credit were welcome features. Also, the proposal to spend ₹22,138 crore on allocations aimed at micro, small, and medium enterprises (MSMEs) for a boost to employment in the country was of high significance, Mr. Rajappa Rajkumar said.

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