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Budget launches National Manufacturing Mission, revises MSMEs classifications
Industry News- Feb 01,25
To boost exports, an Export Promotion Mission will be established with sector-specific and ministerial targets, says budget 2025-26.
New Delhi
Union Finance and Corporate Affairs Minister, Nirmala Sitharaman, announced the launch of a National Manufacturing Mission while presenting the Union Budget 2025-26 in Parliament. This initiative, aimed at strengthening the Make in India movement, will encompass small, medium, and large industries, offering policy support, execution roadmaps, and a governance and monitoring framework for central ministries and state governments.
The Mission will focus on five key areas: enhancing ease and reducing the cost of doing business, developing a future-ready workforce, fostering a dynamic MSME sector, ensuring access to advanced technology, and promoting high-quality products.
Additionally, the initiative will support Clean Tech manufacturing to boost domestic value addition and develop ecosystems for critical sectors such as solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, high-voltage transmission equipment, and grid-scale batteries, according to the Finance Minister.
Highlighting measures for labour-intensive sectors, the Minister stated that the government will introduce specific policies and facilitation measures to promote employment and entrepreneurship in these industries.
To enhance productivity, quality, and competitiveness in India’s footwear and leather industry, a dedicated focus product scheme will be launched. This initiative will support design capabilities, component manufacturing, and machinery for non-leather footwear, along with assistance for leather footwear and related products. The scheme is projected to generate 22 lakh jobs, facilitate a turnover of Rs 4 lakh crore, and drive exports exceeding Rs 1.1 lakh crore.
Furthermore, the Finance Minister proposed a National Action Plan for Toys to position India as a global manufacturing hub. This initiative will focus on developing clusters, skill enhancement, and creating a robust ecosystem for producing innovative, high-quality, and sustainable toys under the ‘Made in India’ brand.
Reaffirming the government’s commitment to ‘Purvodaya,’ FM Nirmala Sitharaman also announced the establishment of a National Institute of Food Technology, Entrepreneurship, and Management in Bihar. This institute will boost food processing activities across Eastern India, increasing farmers' incomes through value addition and creating opportunities for skilling, entrepreneurship, and employment for the region’s youth.
Revised MSME Classification Criteria
The Union Budget 2025-26 envisions the next five years as a crucial period to achieve ‘Sabka Vikas,’ fostering balanced regional growth and advancing the goal of Viksit Bharat.
Recognising MSMEs as a key driver of economic progress, the Budget introduces several measures to accelerate their growth and ensure inclusive development.
Presenting the Union Budget 2025-26 in Parliament, Finance & Corporate Affairs Minister Nirmala Sitharaman announced an increase in investment and turnover limits for MSME classification—raised to 2.5 times and 2 times, respectively. This adjustment aims to enhance economies of scale, encourage technological advancements, and improve access to capital. She emphasized that this move would empower MSMEs to grow with confidence and create employment opportunities for youth.
Currently, India has over 1 crore registered MSMEs employing 7.5 crore people and contributing 36% to manufacturing. Highlighting their impact, the Minister noted that MSMEs are responsible for 45% of India’s exports, playing a pivotal role in positioning the country as a global manufacturing hub.
Expanded credit access with enhanced guarantee cover
To further improve credit availability, the Finance Minister announced an expansion of the credit guarantee cover:
- For Micro and Small Enterprises: Increased from Rs 5 crore to Rs 10 crore, enabling an additional Rs 1.5 lakh crore in credit over five years.
- For Startups: Increased from Rs 10 crore to Rs 20 crore, with a reduced guarantee fee of 1% for loans in 27 key sectors critical to Atmanirbhar Bharat.
- For Well-Performing Exporter MSMEs: Term loans up to Rs 20 crore will now be covered under the guarantee scheme.
Other highlights of the budget are:
Credit Cards for Micro Enterprises: A new customized Credit Card with a Rs 5 lakh limit will be introduced for micro enterprises registered on the Udyam portal. In the first year, 10 lakh such cards are expected to be issued.
Fund of Funds for Startups: Sitharaman highlighted that Alternate Investment Funds (AIFs) for startups have already received commitments exceeding Rs 91,000 crore, backed by a government-supported Fund of Funds with a Rs 10,000 crore contribution. To further strengthen this ecosystem, a new Fund of Funds with an expanded scope and an additional Rs 10,000 crore will be established.
Scheme for First-Time Entrepreneurs: A new initiative will be launched to support 5 lakh first-time entrepreneurs from women, Scheduled Castes, and Scheduled Tribes. The scheme will provide term loans of up to Rs 2 crore over the next five years. Drawing from the success of the Stand-Up India scheme, it will also offer online capacity-building programs for entrepreneurship and managerial skills.
Deep Tech Fund of Funds: As part of efforts to foster innovation, a Deep Tech Fund of Funds will be explored to support next-generation startups in cutting-edge technology sectors.
Export Promotion Mission: To boost exports, an Export Promotion Mission will be established with sector-specific and ministerial targets. Led by the Ministries of Commerce, MSME, and Finance, this initiative will facilitate:
- Easier access to export credit
- Cross-border factoring support
- Assistance to MSMEs in overcoming non-tariff barriers in international markets
(Image Courtesy: FreePik.com)
Budget
Budget 2025
Finance Minister
Nirmala Sitharaman
MSMEs
Capex National Manufacturing Mission
Revises MSMEs classifications
Export Promotion Mission
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