Budget 2025: Enhanced credit, support for women and SC/ST entrepreneurs in the pipeline

Federation of Jharkhand Chamber of Commerce and Industries members watch live telecasts of the presentation of Union Budget 2025, in Ranchi on Saturday. Pic/PTI

Finance Minister Nirmala Sitharaman's eighth Budget provided a shot in the arm to micro, small and medium enterprises, as she proposed a slew of measures including enhancement of investment and turnover limits for their classification, increase in credit guarantee cover for micro and small enterprises and customised credit cards for micro entities registered on the Udyam portal.

The Finance Minister described MSMEs as the second power engine for development, as they constitute 45 per cent of the country's exports. To help MSMEs achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs were enhanced to two-and-a-half and two times, respectively.

Further, steps to enhance credit availability with guarantee cover have also been announced. This will give them the confidence to grow and generate employment for youth, the minister said. The Finance Minister also announced the launch of a new scheme for five lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneur. This will provide term loans of up to Rs 2 crore during the next five years.

To improve access to credit, the FM also proposed enhancement in the credit guarantee cover for MSEs, from Rs 5 crore to Rs 10 crore, leading to additional credit of R1.5 lakh crore in the next five years. For startups, credit guarantee cover has been increased from Rs 10 crore to Rs 20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors important for Atmanirbhar Bharat; and for well-run exporter MSMEs, for term loans of up to Rs 20 crore.

"We will introduce customised credit cards with a Rs 5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued," Sitharaman said. Sitharaman announced that the government will also implement a scheme to make India a global hub for toys representing the ‘Made in India' brand. She added that the government will set up a National Manufacturing Mission covering small, medium and large industries for furthering "Make in India".

India Inc gave a thumbs up to the interventions announced for MSMEs, expressing confidence that these would boost job creation. "Among the many highlights, one of the other ones is about employment generation and we see multiple interventions in MSMEs and employment intensive sectors which would translate into additional job creation," CII President Sanjiv Puri said.

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