Budget 2024: Measures to boost MSMEs announced by Finance Minister Nirmala Sitharaman
The Hindu
Union Budget 2024: In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman announces a slew of measures for the MSME sector
In her seventh budget speech and the first Union Budget presented by the new NDA government, Finance Minister Nirmala Sitharaman announced a bevy of measures aimed at boosting the micro, small and medium enterprise (MSME) sector.
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Saying that the Budget provided special attention to MSMEs and labour-intensive manufacturing, Ms. Sitharaman said that the government has formulated a package covering financial, technological support to MSMEs to spur their growth.
She announced that a credit guarantee scheme to facilitate term loans for machinery without provision of a collateral or third-party guarantee will be introduced. A separately constituted self-financing guarantee fund will provide a guarantee cover up to Rs. 100 crore for each borrower, while the loan amount may be higher.
The Budget also proposes a new assessment model for MSME credit by public sector banks which will not rely on external assessment. This will be based on the digital footprint of MSMEs in the economy, rather than only on assets and turnover criteria traditionally used, the Minister said.
The Budget also provides for credit support to MSMEs during a stress period, through a new mechanism, while being a special mention account for reasons beyond their control, to avoid such enterprises getting into the NPA stage.
Mudra loan limit will be enhanced to Rs. 20 lakh from the current Rs. 10 lakh for those who have availed and successfully repaid loans previously taken under the Tarun category.