KOLKATA: The Union Budget 2021 has conceded with a widespread market demand for supporting micro, small and medium enterprises (MSMEs). Finance minister Nirmala Sitharaman has announced higher allocation of funds along with other reforms for the sector as it faces a massive liquidity and supply crunch, shortage of labour and non-payment of dues.

"We have taken a number of steps to support the MSME sector in this budget. I have provided Rs 15,700 crore to the sector more than double of the last year," she said while presenting the budget in Parliament. In the last budget, the sector was allocated Rs 7,572 crore.

Additionally, the government has also proposed to reduce margin money requirement from 25 per cent to 15 per cent for start-ups.

Earlier, the government had announced Rs 3 crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs as the Covid2019 pandemic walloped a number of such enterprises. The scheme, which was valid till November 2020, has further been extended till 21 March 2021.

According to data shared by the MSME ministry, India has nearly 6.8 million Udyog Aadhar registered MSMEs and 63 million MSMEs in total. MSME-related products accounted for 49.81 per cent of the total exports made during FY20, and the sector provides employment to close to 110 million people in India.

The Union Budget 2021-22 proposals rest on six pillars: health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India reinvigorating human capital, innovation and R&D, minimum government and maximum governance.

"The preparation of this budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with Covid2019 to 2020 is sui generis," the finance minister remarked.