Major ME-Card Boost To Micro Enterprises: Budget 2025-26

New Delhi, Feb 3 (KNN) Finance Minister Nirmala Sitharaman unveiled comprehensive reforms for Micro, Small, and Medium Enterprises (MSMEs) and startups in the 2025-26 Union Budget presentation on February 1. 

The centerpiece of these reforms is a new customised credit card scheme for micro enterprises, known as the ME-Card, available to businesses registered on the Udyam portal.

The ME-Card initiative will provide a credit limit of Rs 5 lakh per card, with plans to distribute one million cards in the inaugural year. 

In a significant move to enhance credit accessibility, the government has doubled the credit guarantee cover for micro and small enterprises from Rs 5 crore to Rs 10 crore, expected to generate Rs 1.5 trillion in additional credit over a five-year period. Export-focused MSMEs will receive expanded support through term loans of up to Rs 20 crore.

The budget introduces substantial changes to MSME classification thresholds, increasing investment and turnover limits by 2.5 and 2 times respectively. 

This adjustment aims to facilitate greater scalability, technological advancement, and improved capital access for these enterprises. 

The government has also extended support to street vendors, with 6.8 million beneficiaries under the PM SVANidhi scheme set to receive enhanced banking support, including increased loan limits and UPI-linked credit cards capped at Rs 30,000.

To bolster entrepreneurship, the government will launch a new Fund of Funds with an initial investment of Rs 10,000 crore. This builds upon existing alternative investment funds that have already secured commitments of Rs 91,000 crore. 

A targeted initiative will provide term loans up to Rs 2 crore for 500,000 women, Scheduled Caste, and Scheduled Tribe entrepreneurs over five years, complemented by online capacity-building programs.

The manufacturing sector receives particular attention through the establishment of a National Manufacturing Mission, designed to support industries of all sizes. 

Specific schemes for the footwear, leather, and toy manufacturing sectors demonstrate the government's commitment to expanding India's manufacturing capabilities. 

These initiatives align with the 'Make in India' campaign, providing comprehensive policy support and governance frameworks.

These reforms come at a crucial time for India's MSME sector, which currently comprises over 10 million registered enterprises employing 75 million individuals. 

The sector contributes 36 percent to the manufacturing sector and accounts for 45 percent of the country's exports. 

Industry experts have lauded the budget's focus on manufacturing and startups, noting that measures such as the Semicon India Programme are expected to attract Rs 1.52 trillion in investments and create 85,000 jobs, while customs duty exemptions on smartphone components and critical minerals will enhance supply chain efficiency.

(KNN Bureau)