Image Source : X Budget 2025 for MSMEs
Union Finance Minister Nirmala Sitharaman presented the first full budget of Modi Government 3.0. Sitharaman unveiled her record eighth consecutive budget in the Lok Sabha and announced key economic reforms. One of the major sectors emphasised in this budget is MSME. Sitharaman announced a credit boost for MSMEs or Micro, Small and Medium Enterprises, to generate employment, especially for the young people. In her budget speech, Finance Minister said the MSMEs are responsible for 45 per cent of India’s exports.
“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.
Enhanced credit cover for MSME
To improve access to credit, the credit guarantee cover will be enhanced as under:
For Micro and Small Enterprises, from Rs 5 crore to 10 crore, leading to additional credit of 1.5 lakh crore in the next 5 years;
For Startups, from ` 10 crore to 20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors important for Atmanirbhar Bharat
For well-run exporter MSMEs, for term loans up to 20 crore
Credit Cards for Micro Enterprises
The government has announced to introduce customised Credit Cards with a Rs5 lakh limit for micro-enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued.
Budget 2025
As one of the major reforms announced via Budget 2025, no income tax is payable up to Rs 12 lakh. Slabs and rates are being changed across the board. The new structure is introduced to substantially reduce taxes of middle class and leave more money in their hands, boosting household consumption, savings and investment. Finance Minister announced ‘nil tax’ slab up to Rs 12 lakh (Rs 12.75 lakh for salaried tax payers with standard deduction of Rs 75,000).
In the Budget 2025, the Finance Minister also announced to introduce new income-tax Bill. She said that the new bill will be clear and direct in text with close to half of the present law. The new tax bill will be simple to understand, leading to tax certainty and reduced litigation. It will be half of the current volume; clear and direct in wording.
