“Be it the youth, women, MSMEs, start-ups, employment or other key aspects, the FY2024-25 Budget has generated a feel-good factor by announcing measures that benefit most stakeholders in some way or the other. For instance, the announcement of five schemes with an overall allocation of Rs1.48 lakh crore for education, skilling and employment initiatives will benefit all the above segments. Additionally, a new skilling scheme sponsored by the Centre over five years will benefit two million youth.
As for MSMEs, a new credit guarantee scheme for small players in manufacturing is being introduced, which will provide guarantees running up to Rs100 crore. This credit guarantee scheme is meant to facilitate term loans for MSMEs to buy machinery and equipment without any guarantee or collateral. It will boost affordable credit for MSMEs, which has been a big problem in this segment.
Besides FDI rules being simplified further, the abolition of angel tax across all investor categories will help MSMEs, start-ups, fintechs and other players across industries at large. A special package has also been created for MSMEs spanning regulatory changes, technology support and finance so the industry can scale up and compete globally. The recommendation to create a new assessment model for MSME credit based on their turnover and assets is another good move. As MSMEs face an estimated funding shortfall of Rs20-25 lakh crore, these measures could help improve liquidity in the industry.“
