Union Budget 2025 Highlights
The Union Finance Minister Nirmala Sitharaman presented the much-awaited 8th consecutive budget in the parliament today on the 1st of February 2025. The new union budget 2025 focused on the growth of various sectors and came with newly launched programs for many. The MSME sector was no exception. The Union Finance Minister announced many important schemes for the sector. She mentioned that the MSME sector is actually generating 36% of the country’s manufacturing. If you wish to know what exactly the Union Budget 2025 had in store for the MSMEs, this article is for you. It brings you all the details about the announcements made in the Union Budget 2025 regarding the MSME sector.
MSME Credit Guarantee Cover Doubled From 5 Cr To 10 Cr: Additional Rs 1.5 Lakh Crore Credit In The Next Five Years
Finance Minister Nirmala Sitharaman through her speech in the parliament announced enhanced guarantee cover for MSMEs. The Credit Guarantee Cover will soon be doubled from 5 Cr to 10 Cr. This will generate an additional Rs 1.5 lakh crore credit in the next five years. The additional guarantee cover for startups will have an enhancement of up to 20 Cr which was previously 10 Cr. This comes with a guaranteed fee reduction of 1% for loans in 27 focus sectors. Both the announcements from the Union Budget 2025 will significantly benefit the MSME sector through increased credit availability. The government has taken these steps to promote the idea of “Atmanirbhar” Bharat according to the finance minister.
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Customized Credit Cards With Limit Of INR 5 Lakhs For Small Businesses
Finance Minister Nirmala Sitharaman also announced in her speech while presenting the Union Budget 2025 the introduction of customized credit cards for small businesses. The limit of these cards is INR 5 Lakhs. This scheme is launched especially for those micro-enterprises that are registered under the Udhyam Portal. In the first year of the PM’s third term, the government will issue 10 lakh such credit cards. This scheme will also enhance the credit availability for small-scale enterprises and contribute to their growth. Snapdeal CEO Kunal Bahl appreciated the move. He explained how this move will allow ease of working capital for the MSMEs.
Investment Limit For MSME Classification Increased
The Union Finance Minister Nirmala Sitharaman in her speech at the parliament also announced a significant increase in the investment limit for MSME classification. Under the new framework announced today, micro-enterprises can now have investments up to INR 2.5 Crore. They can also have an increased turnover of up to 10 Cr. The limits for small enterprises have also been increased up to INR 25 Cr. Their turnover limit is raised to INR 100 Crore. In her speech, the finance minister explained how this move will provide confidence to the small entrepreneurs to grow and generate further employment for the youth of the country.
Special Focus On Manufacturing Toys And Footwear
Nirmala Sitharaman in her speech explained how the MSMEs currently have around 7.5 Cr people employed. She also mentioned that the industry is generating up to 36% of India’s manufacturing which earned the country its position as a global manufacturing hub. She also announced that MSME is the sector responsible for up to 45% of exports in the country. Hence, the government is now going to focus on the MSME manufacturing industry.
According to the finance minister, the government in the coming five years will focus on establishing India as the toys and footwear manufacturing hub across the globe. The government aims to increase the turnover of the footwear industry to INR 4 Lakh Cr. Duty exemptions are also announced over wet blue leather. A similar scheme has been launched for the toy manufacturing industry. The government will focus on the development of clusters and skills for the creation of high-quality and innovative products. This scheme is launched under the banner of “Made in India”.
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Special Support For First Time Entrepreneurs
The Union Budget 2025 also brought new dedicated schemes for entrepreneurs who are diving into the world of business for the first time. The government is going to provide special support to around 5 lakh first-timers. This scheme also covers women entrepreneurs who belong to the scheduled castes and tribes. According to the finance minister, the government will provide term loans up to INR 2 Cr during the next five years. Through this scheme, the government will focus on online capacity building as well as managerial skills.
Final Thoughts
In conclusion, it is clear that the government through the Union Budget 2025 has launched a new mission regarding micro and small enterprises. It is launched under the banner of “Make in India” and focuses on making India a manufacturing hub for the globe. It will ensure ease of business operations, workforce development, MSME sector development, and technology access, along with quality products.
The Finance Minister in her speech during the presentation of Union Budget 2025 explained that the measures announced are a reflection of their commitment to the development of meaningful employment opportunities. This is absolutely necessary for the journey of turning the “Viksit Bharat” dream into reality.
A leading industry chamber representative also made a statement about the reforms. He explained that the increased MSME classification as well as the credit guarantee coverage will ease the access of small businesses to formal credit.
