MSME Stakeholders Urge GST Cuts, Tech Upgrades, and Expanded PLI Benefits in Pre-Budget Meet for 2025-2026

Micro, Small, and Medium Enterprises (MSMEs) are the lifeline of India’s economy, contributing significantly to employment and GDP. At the recent pre-budget consultation meeting for 2025-2026, MSME stakeholders gathered to voice their concerns and make recommendations to Finance Minister Nirmala Sitharaman. The meeting was a platform to discuss reforms that can empower the MSME sector, ranging from GST reductions to technology upgrades and expanded Production-Linked Incentive (PLI) schemes.

Let’s dive into what these leaders discussed and how their suggestions could shape India’s economic future.

Key Discussions at the Pre-Budget Meet

The pre-budget meeting was attended by representatives from various organizations, including the Association of Women Entrepreneurs of Karnataka (AWAKE), Karnataka SC and ST Entrepreneurs’ Association, and many others. Each attendee brought valuable insights to the table, highlighting the challenges and opportunities within their industries.

One of the key points discussed was the need for GST cuts on essential items and industry-specific reforms. Om Prakash Gupta, General Secretary of Laghu Udyog Bharati, emphasized the importance of linking the GeM (Government e-Marketplace) portal with Udyam registration to enhance MSME visibility and market access. He also suggested scaling GeM’s success globally, as it has already achieved an impressive annual turnover of Rs. 4 lakh crore. This move could open international doors for MSMEs and drive significant growth.

Why MSME Reforms Matter

EPPC Rao, President of the Federation of Andhra Pradesh Small and Medium Industries Association, stressed that MSMEs are the backbone of India’s economy. He explained that these enterprises play a crucial role in generating employment, fostering innovation, and supporting local economies. According to Rao, reforms like GST exemptions for Industry 4.0 items, enhanced funding for technology upgrades, and a review of the MSMED Act could significantly boost the sector’s performance.

Rao also pointed out the challenges MSMEs face in accessing finance, urging bankers to follow RBI guidelines for reviving distressed units. By addressing these gaps, the government can strengthen MSMEs and pave the way for a robust economy.

PLI Schemes and Sector-Specific Demands

Stakeholders from various industries advocated for Production-Linked Incentives (PLI) to encourage domestic manufacturing and improve competitiveness.

• Plastic Industry: Arvind Mehta, Chairman of the All India Plastics Manufacturers' Association, called for a technology upgrade fund for plastics, similar to the one available for the textile sector. He also requested GST exemptions for recycling machines and a reduction in GST rates on raw materials. These measures, Mehta argued, would support sustainable growth and encourage innovation in the industry.
  

• Power Electronics: Sudhir Jha from the All India Manufacturers’ Association highlighted the need for PLI schemes for power electronics. These components are essential for everything from industrial machinery to household appliances. Jha believes that incentivizing this sector will not only boost domestic produ ction but also reduce India’s reliance on imports.
  

Such sector-specific reforms would provide MSMEs with the support they need to innovate, scale operations, and compete globally.

Technology, Skill Development, and GeM Portal

One recurring theme during the discussions was the need for technology upgrades and skill development initiatives. Many stakeholders argued that gaps in these areas are holding MSMEs back from reaching their full potential.

The idea of linking the GeM portal with Udyam registration received widespread support. This move could simplify processes for MSMEs, making it easier for them to sell their products and services on the government’s e-marketplace. By expanding the GeM portal’s reach, India’s MSMEs could gain access to a broader customer base, both locally and internationally.

Hope for a Pro-MSME Budget

MSME stakeholders left the pre-budget meeting optimistic that their suggestions will be considered in the upcoming 2025-2026 budget. With the right reforms, the sector could unlock its full potential and contribute even more to India’s economic growth.

Whether it’s addressing GST concerns, offering technology funding, or expanding PLI schemes, these measures would make a world of difference for MSMEs. If you’re part of this dynamic sector, now is the time to take steps to strengthen your business. Consider registering your enterprise under MSME registration to avail of government benefits and open new growth opportunities. Learn more about MSME registration here.