Union Budget 2024: Focus on MSMEs
Finance Minister Nirmala Sitharaman unveiled the Union Budget for 2024 in parliament on Tuesday. Emphasizing the significance of micro, small, and medium enterprises (MSMEs), she announced a comprehensive package tailored to support their growth and global competitiveness.
Key Initiatives for MSMEs:
Credit Guarantee Scheme for Manufacturing
* A credit guarantee scheme will be introduced to facilitate access to term loans for MSMEs seeking machinery and equipment, without collateral or third-party guarantees.
* The scheme will manage credit risks and offer guarantee coverage up to Rs 100 crore per applicant.
New Credit Assessment Model
* Public sector banks will enhance their internal capacity to assess MSMEs for credit based on their digital footprints, moving away from traditional methods.
* This will cater to MSMEs that may not have formal accounting systems.
Credit Support During Financial Stress
* A new mechanism will ensure ongoing bank credit to MSMEs during financial setbacks.
* Credit availability will be backed by a guarantee from a government-sponsored fund.
Expansion of Mudra Loans
* The Mudra loan limit for entrepreneurs who have repaid previous loans under ‘Tarun’ will be increased from Rs 10 lakh to Rs 20 lakh.
Reduction in Turnover Threshold for TReDS Enrollment
* To enhance MSMEs’ access to working capital, the turnover threshold for mandatory enrollment on the TReDS platform will be lowered from Rs 500 crore to Rs 250 crore for buyers.
* This will bring additional companies and medium enterprises onto the platform.
New SIDBI Branches
* Small Industries Development Bank of India (SIDBI) will establish branches in major MSME clusters within 3 years to provide direct credit and support.
Food Irradiation and Safety Units
* Financial assistance will be provided for the establishment of 50 multi-product food irradiation units and 100 NABL-accredited food quality and safety testing laboratories within the MSME sector.
E-Commerce Export Hubs
* E-Commerce Export Hubs will be developed under a public-private partnership model to enable MSMEs and artisans to access international markets.
* These hubs will offer a comprehensive suite of trade and export services.
