Government proposed Comprehensive Boost for MSME Sector in Budget 2024-25

The Ministry of Micro, Small, and Medium Enterprises (MSME) has implemented a number of plans and initiatives aimed at strengthening the MSME sector across the country. These include the Prime Minister's Employment Generation Programme, the Credit Guarantee Scheme for Micro and Small Businesses, the Micro and Small Enterprises Cluster Development Programme, and the Entrepreneurship Skill Development Programme. Furthermore, schemes such as Procurement and Marketing Support, Raising and Accelerating MSME Performance, and the National SC/ST Hub offer comprehensive support to MSMEs by addressing a wide range of developmental needs.

The government's Credit Guarantee Scheme (CGS) has been improved to provide better lending access to Micro and Small Enterprises (MSEs). This initiative allows loans of up to ₹500 lakh without collateral or third-party guarantees. The updated CGS includes term loans and working capital facilities, providing significant relief and opportunity for firms to grow and sustain operations.

In the Union Budget 2024-25, the government proposed a comprehensive package for MSMEs targeted at strengthening funding, regulatory processes, and technological adoption. The budget prioritises the support of MSMEs to boost their growth and global competitiveness. Dedicated credit support for the industrial sector has been announced, coupled with a new credit evaluation mechanism to improve access to funding. Recognising MSMEs' financial concerns, the government has recommended targeted credit facilities during stress periods. The Mudra Loan limit has been increased from ₹10 lakh to ₹20 lakh, expanding financial access for small firms.

The budget also includes provisions for the development of e-commerce export hubs, a greater mandatory inclusion scope in the Trade Receivables Discounting System (TReDS), and the expansion of Small Industries Development Bank of India (SIDBI) branches in MSME clusters. Dedicated food testing and irradiation facilities will also be built to assure quality and safety in MSME food production.

The government has established a number of policies to promote market access and expand global potential. The Public Procurement Policy requires Central Ministries and Public Sector Enterprises to source 25% of their yearly requirements from MSMEs, with 4% coming from SC/ST entrepreneurs and 3% from women entrepreneurs. The Procurement and Marketing Support Scheme encourages MSME participation in national and international trade fairs and exhibitions, thereby increasing their market reach. Furthermore, the Foreign Cooperation Scheme encourages MSMEs to enter global markets by assisting them in attending foreign exhibits, buyer-seller meetings, and hosting international workshops and seminars in India.

First-time exporters can also benefit from the Capacity Building for First-Time Exporters (CBFTE) program. Under this programme, new MSMEs that export can seek reimbursement for expenditures associated with gaining membership certification with export promotion councils, export insurance premiums, and testing and quality certifications.

The government's goal with these rigorous measures is to establish a healthy ecosystem for MSMEs, enabling greater loan availability, increased market prospects, and global competitiveness for Indian firms.