Customized credit cards with ₹5 lakh limit for micro enterprises: FM Nirmala Sitharaman

Union Minister Nirmala Sitharaman on Saturday (February 1, 2025) said the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively, to achieve higher efficiencies of scale, technological upgradation and better access to capital.

Also read:Union Budget 2025 LIVE updates

Presenting the Budget for 2025-26, the Finance Minster said currently, there are over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36% of our manufacturing. These MSMEs have positioned India as a global manufacturing hub, with 45% of our exports coming from them.

Credit guarantee cover for MSMEs

The Finance Minister also announced the introduction of the customized credit cards with a ₹5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued, she said.

“For Micro and Small Enterprises, the credit guarantee cover will be enhanced from ₹5 crore to ₹10 crore, leading to additional credit of ₹1.5 lakh crore in the next 5 years,” she added. She said for well-run exporter MSMEs, term loans would be provided up to ₹20 crore.

Funds for startups

The Finance Minister announced a Fund of Funds for Startups to promote entreprenuership in the budget.

To improve access to credit, the credit guarantee cover will be enhanced, which will also include start-ups, Ms. Sitharaman noted.

Noting that alternative investment funds have received commitments of more than ₹91,000 crore, Ms. Sitharaman announced that a new Fund of Funds with expanded scope and a fresh contribution of another ₹10,000 crore will be set up for start-ups.

A new scheme was also announced to benefit five lakh women and Scheduled Caste/Scheduled Tribe first-time entrepreneurs.

She said a focused scheme will be launched for the footwear and leather sectors while steps will be initiated to make India a global toy manufacturing hub. She announced that the government will set up a National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for Central Ministries and States.

Union Finance Minister Nirmala Sitharaman presented her eight consecutive budget speech this year. She highlighted that this budget would be aimed to accelerate growth, secure inclusive development, invigorate private investment, uplift household sentiments and enhance power of India’s rising middle class. The main areas of focus among citizens for this budget are the poor, youth, farmers and women. As she began her speech, the Opposition rose in uproar over President Droupadi Murmu’s address on Friday (January 31, 2025). They also walked out, but returned to the House shortly.