Sun Feb 02 10:59:53 UTC 2025: ## Indian Budget Boosts MSMEs with Expanded Definitions and New Initiatives

**New Delhi** – Finance Minister Nirmala Sitharaman announced a significant expansion of support for Micro, Small, and Medium Enterprises (MSMEs) in this year’s budget, calling them the “second power engine for development.” The budget includes revised definitions for MSMEs, increasing investment and turnover limits to foster growth.

The investment limit for micro enterprises is now Rs 2.5 crore (up from a previous, unspecified amount), Rs 25 crore for small enterprises (up from a previous, unspecified amount), and Rs 125 crore for medium enterprises (up from a previous, unspecified amount). Turnover limits have also been raised to Rs 10 crore for micro, Rs 100 crore for small, and Rs 500 crore for medium enterprises. These changes reflect the significant contribution of MSMEs, which currently employ 7.5 crore people, generate 36% of India’s manufacturing output, and account for 45% of exports.

Several new initiatives target MSME support:

* **New Loan Scheme:** A new scheme will provide term loans up to Rs 2 crore over five years for first-time entrepreneurs from women and Scheduled Castes/Tribes communities.
* **India as a Toy Hub:** A plan to establish India as a global toy manufacturing hub will focus on developing clusters, skills, and a sustainable manufacturing ecosystem.
* **Enhanced Credit Guarantee:** The credit guarantee cover for micro and small enterprises is increased from Rs 5 crore to Rs 10 crore, and from Rs 10 crore to Rs 20 crore for startups.
* **Footwear and Leather Sector Focus:** A new scheme will support the footwear and leather sector, aiming to create 22 lakh jobs and generate Rs 4 lakh crore in turnover and over Rs 1.1 lakh crore in exports.
* **Customised Credit Cards:** 10 lakh customized credit cards with a Rs 5 lakh limit will be issued to micro enterprises registered on the Udyam portal in the first year.
* **National Institute of Food Technology, Entrepreneurship and Management:** A new institute will be established in Bihar.

The government also emphasized the need for a lighter regulatory framework and announced a high-level committee to review non-financial sector regulations, aligning with the Economic Survey’s recommendation that deregulation is crucial for MSME growth.

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