Indian Government Budget 2025-26 Part 2

 

MSMEs as the second engine

• Encompasses manufacturing and services with a focus on MSMEs totalling 5.7 crore.
• Over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36% of our manufacturing, have positioned India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45% of India’s exports. To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth.
• To improve access to credit, the credit guarantee cover will be enhanced: 
• • For Micro and Small Enterprises, from INR 5 crore to 10 crore, leading to additional credit of INR 1.5 lakh crore in the next 5 years;
  • For Startups, from INR 10 crore to 20 crore, with the guarantee fee being moderated to 1% for loans in 27 focus sectors important for Atmanirbhar Bharat; and
  • For well-run exporter MSMEs, for term loans up to INR 20 crore.
• Customized Credit Cards with a INR 5 lakh limit for micro enterprises registered on Udyam portal will be introduced. In the first year, 10 lakh such cards will be issued.
• The Alternate Investment Funds (AIFs) for startups have received commitments of more than INR 91,000 crore. These are supported by the Fund of Funds set up with a Government contribution of INR 10,000 crore. Now, a new Fund of Funds, with expanded scope and a fresh contribution of another INR 10,000 crore will be set up. 
• A new scheme will be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up to INR 2 crore during the next 5 years. The scheme will incorporate lessons from the successful Stand-Up India scheme. Online capacity building for entrepreneurship and managerial skills will also be organized.   
• To promote employment and entrepreneurship opportunities in labour-intensive sectors, the Government will undertake specific policy and facilitation measures.
• 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 INR 4 lakh crore and exports of over INR 1.1 lakh crore. 
• Building on the National Action Plan for Toys, the government will implement a scheme to make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys that will represent the 'Made in India' brand.
• A National Institute of Food Technology, Entrepreneurship and Management will be established in Bihar to provide a strong fillip to food processing activities in the entire Eastern region. This will result in enhanced income for the farmers through value addition to their produce, and skilling, entrepreneurship and employment opportunities for the youth.
• The 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. 
• The National Manufacturing Mission will also 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.