 "Manufacturing sector")
Finance Minister Nirmala Sitharaman on Saturday paved the way for technological upgradation and better access to capital for micro, small, and medium enterprises (MSMEs) with the investment and turnover limits for classification being raised 2.5 and 2 times, respectively.
“Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports,” said the finance minister.
With this, ‘micro’ enterprises investment limit will be increased from Rs 1 crore to Rs 2.5 crore and turnover has been raised from Rs 5 crore to Rs 10 crore.
Similarly for ‘small’ enterprises, it is up from Rs 10 crore to Rs 25 crore in investment. In case of turnover, it is from Rs 50 crore to Rs 100 crore. ALSO READ: Inclusive Budget to create jobs, boost agriculture and MSME growth
However, for ‘medium’ enterprises, investment has been raised from Rs 50 crore to Rs 125 crore and turnover from Rs 250 crore to Rs 500 crore, respectively.
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“This will give them the confidence to grow and generate employment for our youth,” FM added.
Industry believes that this will improve recovery of money from defaulter buyers.
“This new change will impact more than 20 million small and medium enterprises (SMEs). MSME Act 2006 entitles Micro & Small Industries to recover money within 45 days, failing which the buyer has to pay 3 times the bank interest for the defaulted period. Increasing the limit will entitle more industries to be covered under the present scheme improving financial health of micro & small industries,” said D P Goel, co-chair, MSME committee, PHD Chamber of Commerce and Industry.
The FM noted that to improve access to credit, the credit guarantee cover will be enhanced.
For micro and small enterprises, it will be from Rs 5 crore to Rs 10 crore, leading to an additional credit of Rs 1.5 trillion in 5 years.
For startups, this will be from Rs 10 crore to Rs 20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors important for Atmanirbhar Bharat.
For well-run exporter MSMEs, term loans will be up to Rs 20 crore.
“We will set up an Export Promotion Mission, with sectoral and ministerial targets, driven jointly by the ministries of commerce, MSME, and finance. It will facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in the overseas markets,” said the finance minister.
“The Export Mission (allocation of Rs 2,250 crore) could not have come at a better time, especially when there is a huge potential for Indian B2B & e-commerce exports. However, not extending both the interest equalisation scheme and market access initiative scheme could be a cause for concern for exporting MSMEs,” said Vinod Kumar, president, India SME Forum.
Sitharaman also announced the introduction of customised credit cards for micro enterprises registered in the Udyam portal.
“We will introduce customised credit cards with a Rs 5 lakh limit for micro enterprises registered on the Udyam portal. In the first year, 100 lakh such cards will be issued,” Sitaraman said.
For FY26, the MSME ministry has got Rs 23,168 crore, up from Rs 17, 306 crore, given in the revised estimates for 2025.
