Union Budget 2022-23: There is a need to enable financial institutions to offer manufacturers collateral-free term loans
Indian Union Budget 2022. News18
As we dawn into another COVID season and deal with ambiguities and uncertainties, it is heartening and positive to see the impact that manufacturing has had on the GDP. With a 12.5 per cent growth in manufacturing, this segment is the second highest contributor to the GDP that is poised to attain a 9.2 per cent growth for FY 2022 in spite of the high retail inflation numbers being reported in the last quarter of 2021.
With the advent of India churning out unicorns, startup culture taking centre-stage and the prime minister has given a clarion call to Corporate India to have the ability to take risks and support the start-up culture that is evolving in this country; my personal expectations from this Budget is aligned to this high risk-taking ability thought.
My expectations from the Budget would be in line with propelling Indian MSME manufacturers by recommending a non-risk-averse approach by funding institutions, especially from the banking sector.
Ideally, I recommend policies to instigate rapid growth of manufacturing enterprises in the MSME category and would expect Indian banks and government corporative bodies to be flexible in approach, kill the bureaucratic red tape and make policies that enable financial institutions to be in a position to offer Indian manufacturers collateral-free term loans at EU interest rates of around 5 per cent for Infrastructure development, funding investment of inventories and bill discounting for creating a healthy cash flow system.
In order to truly attain the Atmanirbhar Bharat mission of our prime minister, I wish that we come up with a framework that encourages R&D, especially in the electronics, power electronics, and the mechatronics field. Such R&D will bring down our dependency on Chinese, Taiwanese, and Korean electronic product imports. The MSME category of manufacturers should be able to claim an 80 per cent subsidy of R&D investment for in-house indigenous product development in the field of electronics, power electronics, and mechatronics.
If we have to be aligned to making Atmanirbhar Bharat a reality, then why not propel Indian manufacturing to embark on a journey where an Indian manufactured product is chosen and well-received over an international one.
And such results can only be attained if we encourage Indian product manufacturers with investments that result in developing global benchmark quality products; products that are well-received and have the confidence of our 1.3 billion strong Indian customers.
My recommendations and expectations from this upcoming Budget revolve around actually buying local and not just being vocal for local! We as Indians have many invented phrases that sound good to the ear but I guess we are in a time where we need to put words into action actions, and it is only policymakers that can assist to drive this change recommended above.
The author is Managing Director, Ramagya Mart- B2B e-commerce platform. Views expressed are personal.
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