Summary of Main Announcements for MSME Sector in Budget 2024

On July 23, the Union Budget for 2024-25 was addressed in the Lok Sabha by Finance Minister Nirmala Sitharaman. Here are major announcements for the assistance of MSMEs for the promotion of MSMEs.

This budget furnishes special watches to Micro, Small, and Medium Enterprise (MSME) and manufacturing, particularly labour-intensive manufacturing. The Finance Minister has developed a package covering financing, and regulatory changes.

Major Announcements for the MSMEs

In the Lok Sabha, the Union Budget for 2024-25 was presented by Finance Minister Nirmala Sitharaman on July 23.

Assistance in the Development of MSMEs

This budget furnishes special attention to MSMEs and manufacturing, especially labour-intensive manufacturing. The Finance Minster has developed a package that covers financing, regulatory changes, and technology support for MSMEs to help them grow and also compete globally, as per the interim budget.

New Credit Assessment Model in the MSME Sector

Public sector banks will produce their in-house capability to assess MSMEs for credit, rather than relying on external assessment. They will also take the lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy.

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This is anticipated to be a substantial improvement over the traditional assessment of credit eligibility based solely on asset or turnover criteria. It will also cover MSMEs without a formal accounting system.

Providing Credit Support to Small Businesses During Tough Times

A new procedure to ease the continuation of the bank credit to MSMEs at the time of the pressure. MSMEs are required credit to run their business and to prevent the NPA stage. From a promoted fund of the government, the availability of credit would be supported.

Mudra Loans Limit Increase

The Mudra loans limit will be increased from the current ₹ 10 lakh to ₹ 20 lakh for those entrepreneurs who have taken and successfully repaid previous loans under the ‘Tarun’ category.

Expanded Scope for Mandatory TReDS Onboarding

To ease MSMEs to unlock their working capital via converting their trade receivables into cash, the FM has asked to lessen the turnover limit of the buyers for mandating the onboarding on the TReDS platform from Rs. 500 crore to Rs. 250 crore. This will bring 22 more CPSEs and 7000 more companies onto the platform. Medium enterprises will be included in the scope of the suppliers.

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SIDBI New Branches

SIDBI shall open new branches to grow its reach to help all the major MSME groups within 3 years and deliver direct credit to them. The service coverage will extend to 168 out of 242 major groups with the opening of 24 such branches this year.

MSME Units for Food Testing and Safety Testing Labs

Financial assistance for setting up 50 multi-product food irradiation units in the MSME sector will be furnished. The installation of 100 food quality and safety testing labs with NABL accreditation will be enabled.

MSME Facilitate for E-Commerce Export Hubs

E-Commerce Export Hubs will be established in a public-private-partnership (PPP) mode to facilitate the MSMEs and traditional artisans to sell their products in international markets. Under a regulatory and logistic framework, these hubs will ease trade and export pertinent services under one roof.