Schedule a Call Back
Seven key announcements for MSMEs in Budget 2024
Industry News- Jul 24,24
These budgetary measures are pivotal in ensuring the long-term prosperity of MSMEs in India.
The provisions are as follows:
1. Credit guarantee scheme for machinery and equipment: This scheme will offer term loans for purchasing machinery and equipment without needing collateral or third-party guarantees. A self-financing guarantee fund will provide coverage up to Rs 1 billion per applicant, with borrowers paying upfront and annual guarantee fees.
2. New credit assessment model: Public sector banks will develop in-house capabilities to assess MSMEs based on their digital footprints, moving away from traditional asset or turnover-based criteria. This will help include MSMEs without formal accounting systems.
3. Support during stress periods: A mechanism to ensure continued bank credit for MSMEs during stress periods, backed by a government-promoted fund. The Mudra loan limit will be increased from Rs 1 million to 2 million for those who have repaid previous loans.
4. TReDS platform expansion: The turnover threshold for mandatory on boarding on the TReDS platform will be reduced from Rs 5 billion to Rs 2.5 billion, adding 22 CPSEs and 7,000 companies. Medium enterprises will also be included as suppliers.
5. SIDBI branches in MSME clusters: SIDBI will establish new branches in MSME clusters to enhance direct credit access. With 24 new branches opening this year, service coverage will expand to 168 out of 242 major clusters.
6. Irradiation units and testing labs: Financial support will be provided for 50 irradiation units and 100 NAB-accredited food quality and safety testing labs. E-commerce export hubs will be set up to help MSMEs and traditional artisans sell internationally.
7. E-commerce export hubs: These hubs will operate under a seamless regulatory and logistical framework, offering trade and export-related services to MSMEs and traditional artisans.
---
Past Budget allocations for ECLGS:
2024-25: Rs 6 trillion
2023-24: Rs 5.25 trillion
2022-23: Rs 5 trillion
2021-22: Rs 4.5 trillion
2020-21: Rs 3 trillion
Budget measures:
2020-21: Launch of the ECLGS to provide collateral-free loans to MSMEs with a 100% government guarantee, initially allocated Rs 3 trillion.
2021-22: Increased ECLGS outlay to Rs 4.5 trillion and additional Rs 200 billion for public sector bank recapitalization. Also proposed the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) for Rs 30 billion.
2022-23: Extended ECLGS till March 2023, increasing guarantee cover by Rs 500 billion to Rs 5 trillion. Introduced the RAMP programme with Rs 60 billion over five years.
2023-24: Further extended ECLGS to cover more sectors and small businesses, with a dedicated Rs 157 billion for MSME growth initiatives. Promoted digital payments and e-commerce among MSMEs. Created a Rs 100 billion Fund of Funds for MSMEs.
2024-25 Interim Budget: Extended ECLGS with an additional Rs 1 trillion allocation, totalling Rs 6 trillion. Emphasised infrastructure development for MSMEs with Rs 200 billion capex allocation for industrial clusters, technological parks, and common facility centres.
The Indian Government has consistently prioritised the growth and stability of MSMEs, providing critical financial support, fostering resilience, and laying the groundwork for sustained growth in the MSME sector. These budgetary measures are pivotal in ensuring the long-term prosperity of MSMEs in India.
(Source: CNBCTV18)
Related Stories
Automation & Robotics
India to become Siemens' top market by 2027
Siemens is expanding its existing network of 32 factories in India, with a recent €100 million investment directed towards capital expenditure, supporting growth in its infrastructure, industrial,..
Read moreElectrical & Electronics
India to introduce import limits on laptops, tablets, PCs in 2025
Currently, India permits unrestricted imports of these products, but the proposed limits could reshape the $10 billion IT hardware market, which is highly import-reliant.
Read morePolicy Regulation
India's industrial production rises 3.1% in September
The IIP figures may be revised in future updates in line with the ministry’s revision policy.
Read moreRelated Products
latest News
Subscribe to iNoW
For Industry News on WhatsApp, Give a Miss Call on: +91 84228 74016
