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Union Finance Minister Nirmala Sitharaman is set to present the Union Budget 2021-22 on February 1.
The COVID-19 pandemic had ravaged all the sectors, but it is the micro small and medium enterprises (MSME) sector, which is said to have borne the maximum brunt of the pandemic.
As a result of the pandemic-induced lockdown, the MSME sector has been facing a massive liquidity and supply crunch, shortage of labour and non-payment of dues.
The government had announced a Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs under the Aatmanirbhar Bharat Abhiyan package in order to mitigate the stress caused by the lockdown. The scheme was valid till the month of October.
Finance Minister Sitharaman had later extended the ECLGS till November 2020 and had further extended it till March 21, 2021.
Experts, however, feel the Centre should take more steps for the revival of the MSME sector.
Financial Express had reported that experts have said the government should lower the GST on professional services from 18 percent to 5 percent to boost the MSME sector.
MSME body Federation of Indian Micro and Small & Medium Enterprises (FISME) has sought the temporary suspension of the Basel norms to ease lending from the banking sector, Financial Express had reported.
Further, the experts also want the government to increase the collateral-free loan limit to Rs 5 crore for micro-units, Rs 15 crore for small businesses and Rs 35 crore in case of medium businesses.