Finance Minister Pranab Mukherjee today expressed confidence that the measures announced in the Budget for 2010-11 would revive private investment and put the economy back on a 9 per cent growth trajectory. He said the economy would expand by 8.25-8.75 per cent in 2010-11.
“I am optimistic that the measures I have outlined in this year’s Budget will revive private investment and put the economy back on the growth path of 9 per cent,” Mukherjee said at the foundation day function of the Small Industries Development bank of India (Sidbi) here. He said the economy in 2009-10 was expected to grow by 7.2 per cent, which was “impressive by global standards”.
India’s gross domestic product (GDP) grew by a relatively modest rate of 6.7 per cent in 2008-09 due to the global slowdown after clocking 9 per cent growth for the previous three financial years.
Mukherjee, in his special address, mentioned that the micro, small and medium enterprise (MSME) sector is the pillar of the Indian economy. He noted that finance is a highly effective tool for fighting poverty and promote inclusive growth.
Though 2009-10 began with a difficult global scenario, good news was that the world economy was showing signs of recovery. Further, the fast growth displayed by the Indian economy was indicative of its inherent strength. The resilience and dynamism displayed by MSMEs have in these challenging times shown the critical role of this vibrant sector.
Highlighting the central government’s efforts towards promoting the MSME sector, Mukherjee stated various measures of the government, including enhancement in the limit for presumptive taxation, increasing the threshold for compulsory auditing of accounts of small businesses, extension of interest subvention for exports in certain sectors and exemption from the capital gains tax to facilitate conversion of small businesses to the limited liability partnership format.
The MSME sector contributes 8 per cent of the country’s GDP, 45 per cent of the manufactured output and 40 per cent of our exports and above all, provides employment to nearly 60 million persons through 26 million enterprises.
“Timely availability of credit to MSMEs is extremely important to meet their growing needs and to help them keep their business lifeline vibrant and progressive,” said the finance minister. He said the government would take up the recommendations of the Prime Minister’s task force on MSMEs in a time-bound manner.
