Latest Updates for the MSME in Budget 2025-26

​The Union Budget 2025-26 introduces pivotal measures to bolster India’s Micro, Small, and Medium Enterprises (MSMEs), acknowledging their critical role in the nation’s economic framework. With 5.93 crore registered MSMEs employing over 25 crore individuals, these enterprises significantly contribute to manufacturing, exports, and employment. Notably, in the 2023-24 fiscal year, MSME-related products accounted for 45.73% of India’s total exports, underscoring their importance in establishing the country as a global manufacturing hub. ​Latest Updates for the MSME in Budget 2025-26

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Revised MSME Classification Criteria

To facilitate business expansion and enhance operational efficiency, the government has revised the MSME classification criteria:

• Investment Limits: Increased by 2.5 times.​
• Turnover Limits: Doubled.​

These adjustments aim to encourage technological adoption and stimulate employment generation within the sector. ​

Enhanced Credit Access Latest Updates for the MSME in Budget 2025-26 

The budget outlines several initiatives to improve credit availability for MSMEs:​

• Credit Guarantee Cover: Raised from ₹5 crore to ₹10 crore for micro and small enterprises, facilitating additional credit of ₹1.5 lakh crore over five years.​
• Startups: Guarantee cover doubled from ₹10 crore to ₹20 crore, with a reduced fee of 1% for loans in 27 priority sectors.​
• Exporter MSMEs: Eligible for term loans up to ₹20 crore with enhanced guarantee cover.​

These measures are designed to provide MSMEs with the financial support necessary for growth and competitiveness. ​

Credit Cards for Micro Enterprises

A new customized Credit Card scheme will offer ₹5 lakh in credit to micro enterprises registered on the Udyam portal, with an initial issuance target of 10 lakh cards in the first year. This initiative aims to streamline access to working capital for small businesses. ​

Support for Startups and First-Time Entrepreneurs

To nurture entrepreneurship:​

• Fund of Funds: A ₹10,000 crore fund will be established to support startups
• Inclusive Financing Scheme: Term loans up to ₹2 crore will be provided over five years to 5 lakh first-time women, Scheduled Caste, and Scheduled Tribe entrepreneurs, building upon insights from the Stand-Up India scheme.​

These initiatives aim to foster innovation and inclusivity within the entrepreneurial ecosystem. ​

Focus on labor-Intensive Sectors

The budget introduces sector-specific schemes to boost employment and productivity:​

Footwear and Leather Industry: A Focus Product Scheme will support design, component manufacturing, and non-leather footwear production, aiming to create 22 lakh jobs and achieve a turnover of ₹4 lakh crore.​

• Toy Manufacturing: A new scheme will promote cluster development and skill-building, positioning India as a global hub for toy production

These efforts are tailored to enhance the competitiveness of labor-intensive industries.

Manufacturing and Clean Technology Initiatives

The budget emphasizes advancements in manufacturing and clean technology:​National Manufacturing Mission: Will provide policy support and roadmaps for industries under the Make in India initiative.​

Clean Tech Manufacturing: Focus on domestic production of solar PV cells, EV batteries, wind turbines, and high-voltage transmission equipment.​

These initiatives aim to position India as a leader in sustainable manufacturing practices. ​

Budgetary Allocation

The Ministry of MSME has been allocated ₹23,168.15 crore for the 2025-26 fiscal year, reflecting the government’s commitment to strengthening this vital sector.

In summary, the Union Budget 2025-26 presents a comprehensive strategy to empower MSMEs through enhanced credit access, revised classification criteria, and targeted support for entrepreneurs and labor-intensive industries. These measures are poised to drive innovation, employment, and sustainable growth within India’s MSME sector.​

For more information visit the link:
https://msme.gov.in/sites/default/files/MSMEgazetteofindia0.pdf

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