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In a significant move aimed at strengthening India’s micro, small, and medium enterprises (MSMEs), the Union Budget 2025 has proposed a series of measures designed to propel growth and enhance the competitiveness of the sector. With over 5.7 crore MSMEs in India, the sector plays a crucial role in the nation’s economy, contributing more than 5% to manufacturing and 45% to exports. The government’s latest initiatives are expected to provide substantial financial support and facilitate the growth of these businesses over the next few years.
Enhanced Investment and Turnover Limits
One of the key proposals in the 2025 Budget is the enhancement of investment and turnover limits for MSMEs by 2.5 times. This increase is aimed at helping businesses scale up their operations and explore new opportunities for expansion. The revised limits will allow MSMEs to access a wider range of financial products and gain better access to resources, thereby fostering innovation and growth within the sector.
Boost to Credit Guarantee Scheme
The government has also proposed a significant increase in the credit guarantee cover for MSMEs, which will rise from Rs 5 crore to Rs 10 crore. This measure aims to improve the accessibility of credit for small and medium businesses, making it easier for them to secure loans without needing to offer extensive collateral. This enhanced credit facility is expected to alleviate financial stress, helping MSMEs access the capital they need to grow and invest in new technologies and infrastructure.
Additional Credit of Rs 1.5 Lakh Crore in Next 5 Years
To further boost liquidity in the sector, the government has committed to providing an additional Rs 1.5 lakh crore in credit to MSMEs over the next five years. This move is designed to facilitate access to working capital and long-term financing, helping MSMEs expand their operations, enhance production capacities, and create more job opportunities.
Support for Exporter MSMEs
Recognizing the growing potential of MSMEs in the export sector, the Union Budget 2025 includes provisions to support exporter MSMEs. The government has proposed the availability of term loans of up to Rs 20 crore for MSMEs involved in exports. This measure will provide exporter MSMEs with the financial flexibility to increase their capacity to serve international markets, expand their reach, and contribute further to India’s export growth.
Customized Credit Cards for Micro Enterprises
In a bid to address the specific financial needs of micro-enterprises, the Budget also proposes the launch of customized credit cards with a limit of Rs 5 lakh. Aimed at providing easier access to funds for micro-enterprises, these credit cards will offer a convenient and flexible financing solution. The government plans to issue 10 lakh such cards in the first year itself, further enhancing the financial inclusion of small businesses across the country.
The proposals outlined in the Union Budget 2025 represent a major leap forward for India’s MSME sector, reinforcing its role as the backbone of the country’s economy. With enhanced credit support, increased investment and turnover limits, and measures to facilitate exports, the government is taking decisive steps to nurture and grow MSMEs, ensuring they continue to thrive and contribute to India’s manufacturing and export sectors. The move to introduce customized credit cards for micro enterprises and the increase in credit guarantee coverage are expected to have a transformative impact, empowering MSMEs to scale their businesses and innovate. This strategic push is poised to provide much-needed support, driving growth and job creation across the country.
