Incentives for MSMEs hopefully improve performance: Satya Prabhakar

By Satya Prabhakar

“The budget has provided some incentives for MSMEs and it should hopefully translate into better overall performance for the sector in the coming quarters. The government’s scheme to provide subordinate debt by banks as quasi-equity to MSME entrepreneurs and the extension of the debt restructuring window to March 31st 2021 for MSMEs are both good moves. They will provide an impetus to the sector by improving access to working capital credit and encouraging more entrepreneurship. The budget also seeks to amend regulation to enable NBFCs to extend invoice financing to the MSMEs through TReDS, which will help MSMEs have better control over their cash flows. The budget has also proposed to raise the turnover threshold for audit from the existing Rs. 1 crore to Rs. 5 crores and this move will ease compliance burden on MSMEs.”

(The writer Satya Prabhakar, is the CEO & Founder of Sulekha.com)