Committee findings on mismanagement of MSME ministry should serve as wake-up call for Modi government

The budget allocation for the MSME ministry, the committee said, “apparently appears to be a significant increase” from the budget estimate of Rs 15,699.65 for 2021-22 to Rs 21,422 crore for 2022-22. However, Rs 15,000 crore was earmarked for the Guaranteed Emergency Line of Credit (GECL) scheme, leaving behind Rs 6,422 crore only as actual allocation for the development of other programs/projects of the ministry, the lowest allocation over recent years since 2017-18. spread out through 2020-21.

The committee was also unhappy with the non-use of allocated funds. The ministry has been allocated Rs 15,699.65 crore for the financial year 2021-2022 but it has only spent Rs 12,071.84 crore till 31st January 2022, i.e. only 76.89%.

The SME division has used only Rs 146.6 crore till 31 January 2022, out of Rs 208.65 crore according to the revised estimate for 2021-2022. The actual expenditure was therefore only 70.26%.

Similarly, the ARI division used only Rs 2519.76 crore out of Rs 4202.73 crore, or only 59.95%. DC-MSME spent only 83.32% of the revised estimate.

The Committee found that the current GST regime defeats the very purpose of the digitization process due to the requirement for separate hard copies to be provided by MSMEs to claim reimbursement, which leads to pressure significantly on their cash flow.

Since a number of products for MSMEs are currently imported, which can be made in India, the committee found it even against the vision of “Aatmanirbhar Bharat”.

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