New Delhi:
Union Finance Minister Nirmala Sitharaman on Saturday announced a credit boost for MSMEs or Micro, Small and Medium Enterprises, to generate employment, especially for the young people. To help the enterprises achieve higher efficiency of scale, technological upgradation, and better access to capital, the investment and turnover limits for the classification of all MSMes will be enhanced to 2.5 and 2 times respectively, the Finance Minister said.
According to Ms Sitharaman, the government will improve the credit guarantee cover for micro and small enterprises to Rs 10 crore from the current Rs 5 crore. An additional credit of Rs 1.5 lakh crore will be given in the next five years, she said. For startups, the credit guarantee cover will be enhanced to Rs 20 crore from the current Rs 10 crore – with a guarantee fee down to 1 per cent for loans in 27 focus sectors which, according to Ms Sitharaman, will be important for ‘Aatmanirbhar’ Bharat.
New Classification Criteria for MSMEs
➡️ Investment limit for #MSME classification to be made 2.5 times
➡️ Turnover limits for MSME classification to be doubled#ViksitBharatBudget2025 #Budget2025 #UnionBudget2025 pic.twitter.com/O6HbgW8luX
— PIB India (@PIB_India) February 1, 2025
“MSME, as a second engine, encompasses manufacturing and services with a focus on MSME numbering 5.7 crore. Currently, over 1 crore registered MSMEs employing 7.5 crore people and generating 36 per cent of our manufacturing have come together to position India as a global manufacturing hub,” Ms Sitharaman said while presenting her eighth consecutive Union Budget.
Ms Sitharaman said the MSMEs are responsible for 45 per cent of India’s exports.
The government will also launch customised credit cards for micro enterprises registered on the Udyam Portal – with a limit of Rs 5 lakh. At least 10 lakh cards will be issued in the first year, the Finance Minister said.
Additionally, the government will launch a Rs 2 crore term loan for 5 lakh first-time women, Scheduled Caste (SC), and Scheduled Tribe (ST) entrepreneurs.