Union Budget 2025: FM Enhances MSME Classification; New Scheme for Startups:

Union Budget 2025: FM Enhances MSME Classification; New Scheme for Startups The Union Budget 2025 presented in the parliament today by Finance Minister Nirmala Sitharaman brought major changes. Finance Minister Nirmala Sitharaman unveiled new MSMEs classification criteria in an effort to bring more businesses into the MSME sector. FM said in her Budget speech, "To help them in achieving greater scale efficiencies, technical advancement, and improved capital access, the investment and turnover limitations for all MSMEs will be increased to 2.5 and 2 times, respectively. This will give them the confidence to expand and create jobs for our youth." Various other measures also taken to boots MSMEs sectors.

Credit Cards for Micro Enterprises

Customised Credit Cards with a Rs.5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued.

Scheme for first time Entrepreneurs

For 5 lakh first-time entrepreneurs, including women, Scheduled Castes and Scheduled Tribes, a new scheme is to be launched to provide term loans up to Rs.2 crore during the next 5 years.

Manufacturing Mission

The mission of manufacturing with mandate to focus on:-

• Ease and cost of doing business;
• Future ready workforce for in demand jobs;
• A vibrant and dynamic MSME sector;
• Availability of technology;
• Quality products;
• Clean tech manufacturing for climate-friendly development.

Measures for Labour Intensive Sectors

Focus Product Scheme for Footwear and Leather Sectors: scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs.4 lakh crore and exports of over Rs.1.1 lakh crore. Measures for the Toy Sector: To focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys to represent the 'Made in India' brand. Support for Food Processing: Establishment of a National Institute of Food Technology in Bihar, enhanced income for the farmers and skilling, entrepreneurship and employment opportunities for the youth.

Significant enhancement of Credit availability with Guarantee Cover

Revision in Classification Criteria for MSMEs

New Startup Fund Of Funds

For startups, Sitharaman committed to establish a new fund of funds with an additional Rs.10,000 crore, in addition to the present government investment of Rs.10,000 crore. "The Alternative Investment Funds (AIFs) for startups have received commitments of more than Rs.91,000 crore," the Finance Minister stated during her speech. The Sidbi Fund of Funds is a flagship plan for the government's Startup India initiative. The fund was established on January 16, 2016, and invests in Alternative Investment Funds (AIFs) rather than directly investing startups. According to its data, Sidbi has helped 144 AIFs secure capital commitments.