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Budget 2025: For micro enterprises, the credit guarantee cover will be doubled from Rs 5 crore to Rs 10 crore, leading to additional Rs 1.5 lakh crore credit in the next five years. Government also introduced customised credit cards for micro enterprises
Finance minister Nirmala Sitharaman said on Saturday that the enhanced credit guarantee covers will give MSMEs the confidence to grow and create even more job opportunities for the youth. (PTI Photo)
In good news for MSMEs (micro, small and medium enterprises), Finance Minister Nirmala Sitharaman in the Union Budget 2025 announced increased credit access for enterprises on Saturday.
While announcing enhanced credit guarantee covers, Sitharaman said such a move will give MSMEs the confidence to grow and create even more job opportunities for the youth. She mentioned in her speech that over 1 crore registered MSMEs employ more than 7.5 crore people.
The Union minister also said the MSMEs contribute to around 45% of India’s exports and roughly 36% of India’s manufacturing.
Here are the top points announced by FM for MSMEs:
- For micro enterprises, the MSME credit guarantee cover will be doubled from Rs 5 crore to Rs 10 crore, leading to additional Rs 1.5 lakh crore credit in the next five years.
- Customised credit cards with a limit of Rs 5 lakh will be launched for small businesses registered on the Udyam Portal.
- For startups, from Rs 10 crore to Rs 20 crore with the guarantee fee being moderated to 1% for loans in 27 focus sectors which are important for Aatmanirbhar Bharat.
- Investment limit for MSME classification to be made 2.5 times and the turnover limits for the MSME classification will also be doubled.
What Economic Survey Said On MSMEs
The Economic Survey, released on January 31, recognised government policies and initiatives over the last decade to support and promote the growth of MSMEs .
It observed the tendency for firms in India to remain small and the logic for it often is to be under the regulatory radar and steer clear of the rules and labour and safety laws, adding that the biggest casualties of this are employment generation and labour welfare, which most regulations were originally designed to encourage and protect, respectively.
The survey said governments can help businesses become more efficient, reduce costs, and unlock new growth opportunities by reducing excessive regulatory burdens. Regulations increase the cost of all operational decisions in firms.
The Union government has undertaken deregulation by implementing process and governance reforms, simplifying taxation laws, rationalising labour regulations, and decriminalising business laws.
(with inputs from PTI)
