To enhance their growth potential, the government has proposed increasing investment and turnover limits for MSME classification by 2.5 times and 2 times, respectively.
Finance Minister Nirmala Sitharaman has unveiled significant measures in the Union Budget 2025-26 to strengthen over 1 crore registered micro, small, and medium enterprises (MSMEs), which employ 7.5 crore people and contribute 36 per cent to the country’s manufacturing sector.
Presenting the budget, Sitharaman highlighted the crucial role MSMEs play in India’s export landscape, accounting for 45 per cent of total exports. To enhance their growth potential, the government has proposed increasing investment and turnover limits for MSME classification by 2.5 times and 2 times, respectively.
“This move will empower MSMEs to expand, scale up operations, and create more employment opportunities,” the Finance Minister stated.
Enhanced Credit Access
To facilitate credit access, the government will increase the credit guarantee cover for micro and small enterprises from Rs 5 crore to Rs 10 crore, unlocking an additional Rs 1.5 lakh crore in credit over the next five years. For startups, the credit guarantee limit will rise from Rs 10 crore to Rs 20 crore, with a moderated guarantee fee of 1 per cent for loans in 27 priority sectors under Atmanirbhar Bharat.
“Exporter MSMEs with strong track records will now have access to guaranteed term loans up to Rs 20 crore,” Sitharaman added.
In a bid to simplify financing for micro-enterprises, the government will introduce customised credit cards with a Rs 5 lakh limit for businesses registered on the Udyam portal. The first year of implementation aims to distribute 10 lakh such cards.
Fund of Funds for Startups
Startups have also received a significant boost. The Alternate Investment Funds (AIFs), supported by the Fund of Funds initiative, have attracted commitments exceeding Rs 91,000 crore, backed by an initial Rs 10,000 crore government contribution. To further stimulate startup growth, the government will set up a new Fund of Funds with an additional Rs 10,000 crore contribution.
Special Focus on Women and Marginalised Entrepreneurs
A new initiative will provide term loans of up to Rs 2 crore over the next five years to 5 lakh first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and women. This initiative will build upon lessons from the successful Stand-Up India scheme and include online capacity-building programs for entrepreneurship and management skills.
Boosting Employment in Labour-Intensive Sectors
To promote job creation, the government will implement targeted policies and support measures in labour-intensive industries. These steps align with India’s goal of fostering a robust economic ecosystem that encourages innovation and enterprise.
With 1.59 lakh startups officially recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) as of January 15, India has cemented its position as the world’s third-largest startup ecosystem.
Customs Duty Waived on Life-Saving Drugs
Union Finance Minister Nirmala Sitharaman on Saturday announced exemptions on basic customs duty on 36 life-saving drugs and also gave a big boost to medical tourism.
“Basic customs duty exempted for 36 life-saving drugs, while 6 life-saving drugs will have 5 per cent customs duty,” the FM said, as she presented her eighth consecutive budget and the NDA government’s second full Union Budget of its third term.
“This will provide relief to patients, particularly those suffering from cancer, rare diseases, and other severe chronic diseases,” the FM said.
In a significant move for Patient Assistance Programs (PAPs), the FM waived off customs duty on medicines provided through the programme, expanding access to essential drugs for those in financial distress.
About 13 more patient assistance programs have been added to significantly benefit underprivileged patients.
Further, in a bid to boost medical tourism in the country, the FM announced, a ‘Heal in India’ campaign in partnership with the private sector.
Visa procedures have also been simplified for patients seeking treatment in India to enhance the country’s medical tourism sector.
Medical Tourism in India is estimated to be around $9 billion.
On the Global Medical Tourism Index, India stands at number 10.
The country has seen significant growth in medical tourism in the past year, especially due to the rise of the AYUSH system (Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy).
In 2023, the government also implemented medical visa provisions to facilitate the entry of international tourists seeking health and wellness treatments in the country.
Announcing the Union Budget, FM Sitharaman also announced 10,000 additional seats in medical colleges as well as daycare cancer centres in all district hospitals.
