Finance Minister Nirmala Sitharaman said that turnover limits for being classified as micro, small and medium enterprises will be doubled. In her speech while presenting the 2025 Budget, Sitharaman said that the investment and turnover limit for classification of all MSMEs will be enhanced to 2.5 and 2 times, respectively.
The Union Government will also enhance credit guarantee cover for micro, small and medium enterprises to Rs 10 crore from the existing Rs 5 crore. She said that the government will also introduce customised credit cards with a Rs 5 lakh limit for registered microenterprises.
This will give MSMEs confidence to grow and create jobs for the youth, the finance minister added.
As per government data, India's MSME industry has over one crore registered companies, that employ over 7.5 crore people. Government data also says that MSMEs contribute 45% to the country's exports and 36% to manufacturing.
New Classification Criteria for MSMEs
· Investment limit for MSME classification to be made 2.5 times
· Turnover limits for MSME classification to be doubled#ViksitBharatBudget2025 #Budget2025 #UnionBudget2025 pic.twitter.com/ymPVjGfn3xFebruary 1, 2025AdvertisementDeregulation Pitch For MSMEs
Earlier, the Economic Survey for 2025 had also batted for deregulation in the MSME space, saying that "compliance costs in terms of time and financial resources are non-trivial for MSMEs."
Management and financial bandwidth are limited for smaller enterprises, the survey headed by V Anantha Nageswaran pointed out, and said that deregulation, thus, becomes a policy agenda for small businesses.
Advertisement"The first phase of these reforms focused on reducing the compliance burden, streamlining and digitising systems, processes and information and providing incentives for specific sectors," the survey read.
"The union government has undertaken deregulation by implementing process and governance reforms, simplifying taxation laws, rationalising labour regulations, and decriminalising business laws," it added.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.