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Union budget 2012-13: Government to set up Rs 5,000-crore venture fund for MSMEs, introduce MFI Bill

The country's micro, medium and small enterprises (MSMEs) and agrarian sectors got a boost from finance minister Pranab Mukherjee, as he unveiled a host of fiscal measures designed to shore up the often-embattled sectors.

MSMEs to will have access to a government-sponsored venture fund with a corpus of Rs 5,000 crore, finance minister Pranab Mukherjee announced in the Lok Sabha, while presenting the Union budget for 2012-13.

The India Opportunities Venture Fund will be channeled through the Small Industries Development Bank of India ( Sidbi), which had also recently asked the government for the same amount, to lend to the sagging MSME sector, which comprises of more than 25 million units.

Mukherjee also recommended the sector to involve itself in the manufacture of low-cost medical devices, and proposed reducing basic customs duty to 2.5% with concessional CVD of 6% on on specified parts and components for the manufacture of disposables and instruments.

Mukherjee also hiked the agriculture credit target by Rs 1 lakh crore to Rs. 5.75 lakh crore for 2012-13, and raised the outlay for the embattled farm sector by about 18% to Rs 20,208 crore, as the government looks to boost agrarian output.

State-run National Bank for Agriculture and Rural Development ( Nabard) will be allocated Rs 10,000 crore to refinance regional rural banks, through a short-term credit refinance fund.

Separately, Mukherjee also said that the much-anticipated Microfinance Institution Regulation Bill, along with a host of others, will be introduced in the current parliamentary session.