The Union Budget 2025 introduced significant initiatives aimed at supporting the Micro, Small, and Medium Enterprises (MSMEs). A pivotal move is the introduction of 10 lakh credit cards for micro-enterprises, each with a credit limit of up to Rupees 5 lakh. This step is designed to improve financial access for small businesses and help them manage cash flow more effectively.
Experts, including Jyoti Prakash Gadia, Managing Director at Resurgent India, have hailed this initiative as a potential game changer. However, they emphasize the need for efficient processes that ensure these financial tools truly benefit the grassroots businesses that need them most.
Key Highlights:
- Credit Accessibility: Introduction of specialized credit cards to improve liquidity for small enterprises.
- Increased Credit Guarantee: The budget increased the credit guarantee from Rs 5 crore to Rs 10 crore, aiming to generate an additional Rs 1.5 lakh crore credit in the next five years.
Challenges in Loan Disbursement
While the introduction of credit facilities is a positive step, the effectiveness of these measures depends on the loan disbursement process. Mukul Goyal, Co-Founder of Stratefix Consulting, pointed out that small businesses often struggle with bureaucratic hurdles that delay access to necessary funds. Streamlining these processes is crucial for the success of the budget’s initiatives.
Areas for Improvement:
- Reducing bureaucratic procedures to speed up loan approvals.
- Ensuring timely fund disbursement to eligible businesses.
Strengthening ‘Make in India’
The budget also focuses on bolstering the ‘Make in India’ initiative, which aims to turn India into a global manufacturing hub. Finance Minister Nirmala Sitharaman outlined measures to facilitate investment, foster innovation, and enhance skill development across industries.
Significant measures include the launch of the National Manufacturing Mission, which aims to support industries of all sizes with policy guidance and infrastructure development. This mission is expected to make it easier for businesses to operate and compete internationally.
Focus Areas:
Focus Area | Goals |
Business Ease | Make it simpler and less costly for businesses to run. |
Workforce Development | Train people for jobs that industries strongly need. |
Technology Adoption | Help businesses use modern tech to improve products. |
Supporting Specific Sectors
Targeted support for the leather and toy industries is another highlight of the budget. These sectors are expected to benefit from improved design and manufacturing capabilities, which could lead to increased competitiveness and expanded market reach.
The Council for Leather Exports announced a new scheme expected to significantly boost productivity and exports in the leather sector. This initiative will support various aspects of leather production, from design to manufacturing, attracting more investments and enhancing overall sector performance.
Expected Benefits:
- Enhanced design and manufacturing capacity.
- Increased exports and global competitiveness.
- Job creation across the industry.
Overall, the Union Budget 2025 has laid a strong foundation for the growth of MSMEs and the manufacturing sector. However, its success will largely depend on how effectively these policies are implemented and whether they can address the current challenges faced by businesses. Industry leaders remain optimistic but cautious, emphasizing the need for practical and timely application of these measures.