Boost for MSMEs, classification investment cap to be hiked 2.5 times

The Indian government would strengthen the country's MSME sector.

Finance Minsister Nirmala Sitharaman, while presenting Union Budget 2025 mentioned the government would prioritise the MSME (micro, small and medium enterprises) sector of the country.

The government said that the investment limit for MSME classification to be made 2.5 times. Also, the turnover limit for MSME classification would be doubled. This would not only pace up the country's manufacturing sector, scale up and innovate the MSME sector, but would also provide employment opportunities for countless youth across the country.

Sitharaman in her speech, said, "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."

"To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth," she mentioned.

The Finance Minister announced a credit guarantee cover to be enhanced from Rs 5 core to Rs 10 crore and for well-run exporter MSMEs, terms loans up to Rs 20 crore will be provided.

The government also announced introducing customised credit cards for micro enterprises.

"We will introduce customised Credit Cards with a 5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued," stated the Finance Minister.

On MSME as second engine of growth, Sandeep Chilana, Managing Partner CCLaw said, “Union Budget 2025 pays specific attention to MSME by enhancing threshold for qualification as MSME as well as improving credit facilities of MSMEs including specialised credit cards to be used for SMEs and setting up of new fund for investments in startups.”

The country has more than one crore registered MSMEs, which gives employment to nearly 7.5 crore people.