Booster dose for MSMEs with higher credit limits, lower guarantee fee
Finance Minister Nirmala Sitharaman unveiled a series of measures to support India’s micro, small and medium enterprises (MSMEs), a sector responsible for 45 per cent of the country’s exports.
To help them achieve higher efficiencies of scale, technological upgrade and better access to capital, the investment limit for classification of all MSMEs has been enhanced 2.5 times. Also, the turnover limit for MSME classification would be doubled. The move is expected to enable small enterprises to grow confidently and create more job opportunities for India's youth.
The measures include a substantial increase in credit guarantee coverage for micro and small enterprises, with the guarantee cover rising from Rs 5 crore to Rs 10 crore.
Also, the Budget introduces a new, customised credit card with a Rs 5 lakh limit, targeting 10 lakh MSMEs registered on the Udyam Portal in its first year. This initiative is designed to improve access to credit and help businesses thrive.
To enhance the productivity, quality and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs 4 lakh crore and exports of over Rs 1.1 lakh crore.
Building on the National Action Plan for Toys, the budget announced a scheme to make India a global hub for toys. The scheme will focus on development of clusters, skills and a manufacturing ecosystem to help create high-quality, unique, innovative and sustainable toys that will represent the 'Made in India' brand.
“Our government will set up a National Manufacturing Mission, covering small, medium and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states,” Finance Minister Nirmala Sitharaman said.
The mission will support clean-tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolysers, wind turbines, very high voltage transmission equipment and grid scale batteries
Sitharaman said an Export Promotion Mission, with sectoral and ministerial targets, driven jointly by the ministry of Commerce, MSME, and Finance will be set up. She also informed that the mission will facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.
As the second engine of India’s economy, MSMEs contribute significantly to both manufacturing and services, with over 5.7 crore registered units employing 7.5 crore people and accounting for 36 per cent of the country’s manufacturing output.
