The Indian government's latest budget underscores a strong commitment to boosting the economy through strategic support for Micro, Small, and Medium Enterprises (MSMEs), enhanced investment, and export promotion. These sectors are crucial for job creation, economic diversification, and global competitiveness. This blog post will explore the key measures introduced to strengthen these vital areas.
Empowering MSMEs
1. MSMEs as the 2nd Engine
The budget identifies MSMEs as the second key engine for economic growth, recognizing their significant contribution to manufacturing, services, and employment generation.
2. Revised Classification Criteria
To help MSMEs achieve higher efficiency and access to capital, the government will increase investment and turnover limits for MSME classification by 2.5 and 2 times, respectively. This change aims to encourage growth and employment in the sector.
3. Enhanced Credit Availability
The budget aims to improve access to credit for MSMEs through an enhanced credit guarantee cover, facilitating easier financing options.
4. Fund of Funds for Startups
A new Fund of Funds with a contribution of ₹10,000 crore will be established to support startups, building on the success of previous initiatives. This fund will have an expanded scope to foster innovation and entrepreneurship.
5. Scheme for First-Time Entrepreneurs
A new scheme will provide term loans up to ₹2 crore for 5 lakh first-time entrepreneurs, with a focus on women, Scheduled Castes, and Scheduled Tribes, promoting inclusivity in entrepreneurship.
6. Measures for Labor-Intensive Sectors
The government will undertake specific policy and facilitation measures to promote employment and entrepreneurship in labor-intensive sectors, enhancing job opportunities.
7. Focus Product Scheme for Footwear & Leather
A scheme will be implemented to enhance the productivity and competitiveness of India’s footwear and leather sector. This initiative is expected to create employment for 22 lakh people, generate a turnover of ₹4 lakh crore, and achieve exports of ₹1.1 lakh crore.
8. Measures for the Toy Sector
Building on the National Action Plan for Toys, a scheme will be implemented to make India a global hub for toys, focusing on clusters, skills, and a sustainable manufacturing ecosystem.
9. Support for Food Processing
A National Institute of Food Technology, Entrepreneurship and Management will be established in Bihar to boost food processing activities in the eastern region, enhancing farmer income and creating skilling and employment opportunities for the youth.
10. Manufacturing Mission - "Make in India"
A National Manufacturing Mission will be set up to further the "Make in India" initiative across small, medium, and large industries by providing policy support, execution roadmaps, and a governance framework.
Boosting Investment
1. Investment as the 3rd Engine
Investment is identified as the third key engine for driving economic development.
2. Public Private Partnership (PPP) in Infrastructure
Each infrastructure-related ministry will develop a 3-year pipeline of projects to be implemented through PPP mode. States will also be encouraged to adopt this approach and seek support from the IIPDF for proposal preparation.
3. Support to States for Infrastructure
An outlay of ₹1.5 lakh crore is proposed as interest-free loans to states for capital expenditure and incentives for reforms, facilitating infrastructure development.
4. Asset Monetization Plan 2025-30
A second asset monetization plan will be launched to plough back capital of ₹10 lakh crore into new projects, enhancing public resources for development.
5. SWAMIH Fund 2
Building on the success of the SWAMIH fund, a new fund of ₹15,000 crore will be established to facilitate the completion of another 1 lakh stressed housing units.
6. PM Gati Shakti Data
The private sector will be given access to relevant data and maps from the PM Gati Shakti portal to further PPPs and assist in project planning.
Promoting Exports
1. Exports as the 4th Engine
The budget recognizes exports as the fourth engine of economic growth.
2. Export Promotion Mission
An Export Promotion Mission will be established, driven jointly by the Ministries of Commerce, MSME, and Finance, with sectoral and ministerial targets. This mission will provide access to export credit, cross-border factoring support, and assistance for MSMEs in tackling non-tariff barriers in overseas markets.
3. BharatTradeNet (BTN)
A digital public infrastructure, BharatTradeNet, will be set up as a unified platform for international trade documentation and financing, streamlining export processes
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