Finance Minister Unveils Robust Measures to Boost MSMEs in Union Budget 2024-25

Finance Minister Nirmala Sitharaman announced significant measures for the MSME sector in the Union Budget 2024-25, including a Rs 100 crore Credit Guarantee scheme and expansion of SIDBI branches to facilitate growth and global competition.

Finance Minister Nirmala Sitharaman on Tuesday unveiled a comprehensive array of measures aimed at propelling the micro, small, and medium enterprise (MSME) sector forward. Announced during the presentation of the Union Budget 2024-25, these measures focus on financial and technological support to boost growth and global competitiveness.

Sitharaman revealed a new Credit Guarantee scheme valued at Rs 100 crore, designed to bolster MSME credit eligibility through in-house capability development and revised assessment models. "This budget provides special attention to MSMEs and manufacturing," she stated during her speech, emphasizing the creation of a separate guarantee fund to back these enterprises.

The scheme is set to offer term loans for machinery and equipment purchases without requiring collateral or third-party guarantees, pooling credit risks instead. Additionally, the government-promoted fund will ensure continued bank credit to MSMEs in the Special Mention Account (SMA) stage. Banks are to develop in-house credit assessment capabilities, reducing reliance on external assessments.

Further, the MUDRA loan limit for the Tarun category has been doubled to Rs 20 lakh. The turnover threshold for mandatory onboarding on the TReDS platform will be decreased, broadening participation among enterprises. In a push for expanding infrastructure, SIDBI branches will increase to cover 168 of the total 242 MSME clusters within the next three years.

E-commerce export hubs will be developed in public-private partnership (PPP) mode to help traditional artisans and MSMEs access international markets. These hubs will offer streamlined trade and export services. Moreover, financial support will be provided for 50 multi-product food irradiation units and 100 NABL-accredited food testing labs in the MSME sector.

The Union Budget also allocates funds for 12 industrial parks under the National Industrial Corridor Programme, aiming to facilitate rental housing for industrial workers through PPP initiatives. The government plans to develop investment-ready "plug and play" industrial parks in collaboration with states and the private sector, enhancing urban planning efforts.

(With inputs from agencies.)