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MSME Sector: Focus on credit allocation, but many issues remain unaddressed
BUSINESS ECONOMICS
|March 1-31, 2025
The Budget 2025-26 primarily emphasizes credit facilities, revised classification, and targeted support for first-time entrepreneurs.
While these initiatives are commendable, the MSME sector requires attention on several other fronts to build a robust industrial base. Like agriculture, MSMEs form the backbone of the economy, with a high employment potential. The sector accounts for 45% of India's exports, employing 7.5 crore people across more than one crore registered MSMEs and contributing 36% to manufacturing output.
Key Budget 2025-26 Allocations for MSMEs
1. Expanded Definition of MSMEs
The Budget has redefined MSMEs to allow enterprises to expand while still qualifying for government support. The revised investment and turnover limits are as follows:
- Micro Enterprises: Investment threshold raised from ₹1 crore to ₹2.5 crore, and turnover limit increased from ₹5 crore to ₹10 crore.
- Small Enterprises: Investment limit increased from ₹10 crore to ₹25 crore, and turnover threshold raised from ₹50 crore to ₹100 crore.
- Medium Enterprises: Investment cap extended from ₹50 crore to ₹125 crore, with the turnover limit increased from ₹250 crore to₹ 500 crore.
2. Enhanced Credit Facilities
This story is from the March 1-31, 2025 edition of BUSINESS ECONOMICS.
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