In the Union Budget 2025 presented by Finance Minister Nirmala Sitharaman, the Indian government has announced a strong commitment to prioritizing the Micro, Small, and Medium Enterprises (MSMEs) sector. This initiative aims to bolster the country’s manufacturing capabilities, enhance employment opportunities, and drive economic growth.
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Key Highlights of the Budget for MSMEs
Increased Investment and Turnover Limits
One of the most significant announcements in the budget is the increase in the investment and turnover limits for MSME classification. The government plans to raise the investment cap by 2.5 times and double the turnover limit. This change is expected to empower existing MSMEs and encourage new startups, allowing them to scale operations and innovate more effectively.
Credit Guarantee Scheme
Government, in a recent move, increased the credit guarantee cover from ₹5 crore to ₹10 crores to augment support to MSMEs. This would open better access of capital to the micro-enterprises so that these can be capitalized for growth and expansion. Satisfactorily performing exporter MSMEs also get term loans up to ₹20 crores to further trade internationally.
Introducing Customized Credit Cards
As part of simplifying financial access for micro enterprises, the government will launch customized credit cards for ₹5 lakh limits to all business registered on the Udyam portal. This move is to be used for the issue of 10 lakh cards in the first year and can easily manage expenses and investments by micro enterprises
Employment and Economic Growth
The MSME sector is very important for the Indian economy as it provides employment to around 7.5 crore people and accounts for 36% of the country’s manufacturing output. By focusing on this sector, the government hopes to generate thousands of jobs for the youth and transform the overall economic scenario. Sitharaman stated that the focus of the government on MSMEs is important for India to become a global manufacturing destination.
Expert Views
Some say it is to their credit also since the budgets this time took efforts to create optimism in those in the fray as well through much-needed upgrading of credit facility and investment limitation. According to Managing Partner Sandeep Chilana with CCLaw that he is glad about paying specific heed in the Budget on MSME that is almost touted as India’s second big growth engine today. The announced moves are seen improving efficiencies and technologies and thereby facilitating capital among those enterprises in need.
The Union Budget 2025 is the better commitment of the Indian government to the betterment of MSMEs. The government has enhanced the investment limits, improved credit facilities, and introduced innovative financial products to empower small businesses and establish economic growth. They are the initiatives that are going to shape the future of Indian economy with the evolving MSME sector.
