Union Budget 2025: Empowering MSMEs as Catalysts for Economic Growth With MSMEs contributing approximately 36 per cent to manufacturing output and 45 per cent to exports, the sector's role in achieving the vision of 'Viksit Bharat' is undeniable.
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The Union Budget 2025 has reinforced the government's commitment to strengthening the Micro, Small, and Medium Enterprises (MSME) sector, recognizing it as a crucial pillar of India's economic development. With MSMEs contributing approximately 36 per cent to manufacturing output and 45 per cent to exports, the sector's role in achieving the vision of 'Viksit Bharat' is undeniable.
Finance Minister Nirmala Sitharaman, in her budget speech today, highlighted MSMEs as one of the four primary engines of growth. A range of targeted measures, including enhanced credit access, sector-specific incentives, and regulatory reforms, were unveiled to bolster small businesses.
One of the most significant moves in the budget is the introduction of 10 lakh credit cards for micro-enterprises, each with a credit limit of INR 5 lakh. This initiative is expected to be a game changer, ensuring better access to much-needed financial support for businesses registered under the Udyam portal.
Jyoti Prakash Gadia, MD, Resurgent India, lauded the initiative, stating, "The budget rightly emphasizes MSMEs' ability to contribute to inclusive growth. The availability of credit cards for micro-enterprises and increased amounts under guarantee schemes for exporters are welcome steps for long-term development."
Additionally, the government has raised the credit guarantee cover for micro-enterprises from INR 5 crore to INR 10 crore, a move expected to inject an additional INR 1.5 lakh crore in credit over the next five years.
Anand Kumar Bajaj, Founder, CEO & MD of PayNearby, noted, "This move will empower local businesses and ensure a more robust economic framework. The increased credit guarantee covers and customized credit cards for micro-enterprises will provide much-needed relief to entrepreneurs."
The budget also introduced product-specific initiatives for industries like leather goods and toys, signaling a focused approach to enhance sectoral growth. Mukul Goyal, co-founder of Stratefix Consulting, praised the move, stating, "The enhancement in investment and turnover thresholds for MSME classification will allow more enterprises to benefit from government incentives, fostering growth and competitiveness."
Recognizing the role of digitization in MSME growth, the budget emphasizes technology adoption. Encouraging small businesses to integrate digital tools can improve operational efficiency and expand market reach. Experts have called for additional incentives for technology adoption and digital literacy programs to ensure seamless transition and implementation.
Ashok Mittal, MD & CEO of BillMart Fintech, highlighted the fintech sector's role in MSME financing, stating, "For fintech and digital lending companies, the budget creates a robust environment to provide seamless access to credit, enabling MSMEs to scale operations and drive inclusive economic growth."
The Union Budget 2025 presents a forward-looking roadmap for MSME growth, combining financial incentives with regulatory support and digital transformation. With these reforms, MSMEs are poised to play a transformative role in India's economic trajectory, further strengthening the nation's position as a global manufacturing hub.
