Higher Mudra loans to help MSMEs and small ticket loan seekers: FM
Nirmala Sitharaman focuses on simplifying corporate compliances, MSME-related laws, and increasing Mudra loans value to support business expansion and modernization. The initiative aims to provide liquidity and empower small loan seekers for growt...
By Navika Kumar, 
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ETMarkets.com
Finance Minister Nirmala Sitharaman says: “Whether it is aimed at employment or not, it is certainly aimed at helping the MSMEs and the small ticket loan seekers. The small ticket loan seekers are the people who cannot give collaterals at all. We had extended a lot of help for them.” Excerpts from the interview
On corporate compliances
Nirmala Sitharaman: From the point of view of businesses feeling that our compliances are very complicated, whether it is the direct income tax, direct taxation or whether it is the corporate ministry, Ministry of Corporate Affairs and their various requirements or other MSME-related laws in general and also the way in which many of the codes have been functioning, we have been periodically looking at them and making sure that little by little we are able to eliminate certain provisions which are becoming cumbersome.
Those have been happening between 2014 and 2019 in small elements and post 2020, we have been doing it in a lot more bulky fashion. But the idea is that eventually doing business in India or doing your own compliance in terms of citizen's requirement for taxation or any other compliance, there should be ease, there should be simplicity, there should be a very straightforward way of doing it.
You talk about using digital India infrastructure, simplification of laws and GST portals, but you also talk about the fact that you are also going to increase the maximum anount under Mudra loans from Rs 10 lakh to Rs 20 lakh each. Does this address the problem of the MSME sector and therefore employment, which is the big elephant in the room?
Nirmala Sitharaman: Whether it is aimed at employment or not, it is certainly aimed at helping the MSMEs and the small ticket loan seekers. The small ticket loan seekers are the people who cannot give collaterals at all. We had extended a lot of help for them. Their businesses are the ones which provide the collateral for themselves because as the business flourishes, their power, their creditworthiness improves. We have recognised that and have extended this and so there is more liquidity in their hand to plan for their business expansion or even to update and modernise or bring technology into businesses.
On corporate compliances
Nirmala Sitharaman: From the point of view of businesses feeling that our compliances are very complicated, whether it is the direct income tax, direct taxation or whether it is the corporate ministry, Ministry of Corporate Affairs and their various requirements or other MSME-related laws in general and also the way in which many of the codes have been functioning, we have been periodically looking at them and making sure that little by little we are able to eliminate certain provisions which are becoming cumbersome.
Those have been happening between 2014 and 2019 in small elements and post 2020, we have been doing it in a lot more bulky fashion. But the idea is that eventually doing business in India or doing your own compliance in terms of citizen's requirement for taxation or any other compliance, there should be ease, there should be simplicity, there should be a very straightforward way of doing it.
You talk about using digital India infrastructure, simplification of laws and GST portals, but you also talk about the fact that you are also going to increase the maximum anount under Mudra loans from Rs 10 lakh to Rs 20 lakh each. Does this address the problem of the MSME sector and therefore employment, which is the big elephant in the room?
Nirmala Sitharaman: Whether it is aimed at employment or not, it is certainly aimed at helping the MSMEs and the small ticket loan seekers. The small ticket loan seekers are the people who cannot give collaterals at all. We had extended a lot of help for them. Their businesses are the ones which provide the collateral for themselves because as the business flourishes, their power, their creditworthiness improves. We have recognised that and have extended this and so there is more liquidity in their hand to plan for their business expansion or even to update and modernise or bring technology into businesses.
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