Key Highlights Of MSME Budget 2024 announced by Finance Minister Nirmala Sitharaman

The Union Budget 2024-25 has underscored a steadfast commitment to propelling the Micro, Small, and Medium Enterprises (MSMEs) sector to new heights. Recognizing the backbone role of MSMEs in India’s economic growth story, the budget 2024-25 has unveiled a series of strategic initiatives aimed at enhancing their competitiveness, expanding their reach, and fostering a conducive business environment. By addressing critical challenges such as access to finance, technology adoption, and market linkages, the government has demonstrated its resolve to empower MSMEs and unlock their immense potential for job creation and economic prosperity.

Key highlights of Union Budget 2024-25 and how they are poised to aid Indian MSMEs and business owners:

1. Enhanced Support for MSMEs:

– A credit guarantee scheme for MSMEs in the manufacturing sector will be introduced to facilitate term loans without the need for collateral.

-Increase the Mudra loan limit to ₹20 lakh to support entrepreneurs.

– Reduction in the turnover threshold for mandatory onboarding to the Trade Receivables -Discounting System (TReDS), increasing liquidity by accelerating the conversion of trade receivables into cash.

-SIDBI will open new branches to expand its reach to serve all major MSME clusters within 3 years and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters. 

2. Employment and Skilling Initiatives:

– Implementation of three new schemes under the ‘Employment Linked Incentive’ to boost job creation across various sectors by subsidizing wages and enhancing EPFO enrollments.

– Launch of a comprehensive skilling program to upgrade Industrial Training Institutes (ITIs) and align their courses with industry needs to enhance employment.

3. Infrastructure Development:

– Increased allocation for infrastructure with a focus on urban and rural development to stimulate economic growth and improve connectivity.

– Promotion of investment-ready industrial parks and development of new infrastructure under various corridors to bolster industrial growth and connectivity.

4. Agricultural and Rural Focus:

– Major push towards digitization in agriculture with the rollout of Digital Public Infrastructure aiming to integrate land records and farmer details.

– Enhancement of agricultural productivity and resilience through research and introduction of new, high-yielding crop varieties.

5. Incentives for Technology and Innovation:

– Establish a critical mineral mission to ensure the domestic supply and development of essential minerals.

– Promotion of innovation through the operationalization of the National Research Fund and encouragement of private-sector R&D investments.

 6. Financial Sector Reforms:

– Revamping the financial architecture for MSMEs through a new credit assessment model that utilizes digital footprints.

– Continuation of reforms in the banking sector to enhance the overall financial stability and support economic growth.

7. Focus on Energy Security:

– Introduction of policies to support the transition to renewable energy, including incentives for solar and nuclear power.

– Implementation of a new pumped storage policy to support electricity storage solutions.

8 E-Commerce Export Hubs

-To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in public-private-partnership (PPP) mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export-related services under one roof. 

9 MSME Units for Food Irradiation, Quality & Safety Testing 

-Financial support for setting up 50 multi-product food irradiation units in the MSME sector will be provided.  The setting up of 100 food quality and safety testing labs with NABL accreditation will be facilitated. 

Conclusion

These initiatives, set within the broader economic policy framework laid out in the  MSME budget 2024-25, aim to support the foundational sectors of the economy, improve the ease of doing business, and ensure sustainable growth with a focus on self-reliance and innovation. These measures are designed to not only aid in immediate economic recovery but also pave the way for long-term industrial and technological advancement.

Also Read: MSME Schemes for the Manufacturing Sector