Union Finance Minister Nirmala Sitharaman, in her budget speech, highlighted the crucial role of Micro, Small, and Medium Enterprises (MSMEs) as the second engine driving India’s economy alongside large industries. With 5.7 crore MSMEs spanning manufacturing and services, the sector contributes 36% of manufacturing output and 45% of India’s exports, reinforcing India’s position as a global manufacturing hub.

To support MSMEs in achieving higher efficiency, technological upgradation, and better access to capital, the government will enhance the investment and turnover limits for MSME classification by 2.5 times and 2 times, respectively.

To further improve access to credit, the government will enhance the credit guarantee cover, extending support not only to MSMEs but also to startups.

A new Fund of Funds for Startups will be launched, expanding the scope of alternative investment funds, which have already secured commitments exceeding ₹91,000 crore. An additional ₹10,000 crore will be allocated to this fund to promote startup growth.

Additionally, a new entrepreneurship scheme will be introduced, targeting 5 lakh first-time women entrepreneurs from Scheduled Castes (SC) and Scheduled Tribes (ST), fostering inclusivity and economic empowerment.

These initiatives reflect the government’s commitment to strengthening MSMEs and startups, ensuring their sustained contribution to India’s economic growth and global competitiveness.