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MSMEs Budget 2024-25, New Credit Guarantee Scheme

MSMEs Budget 2024-25 is set and released by the finance minister of India. Thee are several strategic measures to check Micro, Small, and Medium Enterprises (MSMEs).
authorImageShruti Dutta29 Jul, 2024
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MSMEs Budget 2024-25

MSMEs Budget 2024-25 introduces several strategic measures to bolster Micro, Small, and Medium Enterprises (MSMEs). Recognising their critical role in driving economic growth, job creation, and innovation, the government has outlined a series of initiatives and financial allocations to support these enterprises.

These measures include enhanced credit facilities, increased funding for key schemes, and new mechanisms to facilitate easier access to capital. MSMEs Budget 2024-25 focuses on strengthening the MSME sector's resilience and capacity for growth, ensuring broader financial inclusion, and promoting entrepreneurial development across various industries.

What is the MSMEs?

Micro, Small, and Medium Enterprises (MSMEs) refer to businesses categorised based on their size and scale of operations. These enterprises play a crucial role in a country's economic development by contributing to employment, innovation, and industrial growth. MSMEs Meaning are typically classified based on criteria such as investment in plant and machinery or equipment and annual turnover.

  • Microenterprises : Businesses with a small scale of operations, typically defined by a low investment in plant and machinery or equipment and a modest annual turnover.
  • Small Enterprises : Businesses larger than micro-enterprises but still relatively small in scale, with moderate investment and turnover.
  • Medium Enterprises: businesses larger than small enterprises that have yet to scale. They have higher levels of investment and turnover.

MSMEs Budget 2024-25

The MSMEs Budget 2024-25 includes several provisions to support the growth and sustainability of Micro, Small, and Medium Enterprises (MSMEs). These budget estimates outline the financial allocations for various schemes and programs designed to enhance the capabilities and reach of MSMEs, thereby fostering economic development and innovation. Here is a summary of the key budget estimates for MSMEs Budget 2024-25:
MSMEs Budget 2024-25
Scheme 2023-24 Allocation (₹ Crore) 2024-25 Allocation (₹ Crore) Change (%)
Emergency Credit Line Guarantee Scheme (ECLGS) 5,25,000 6,00,000 +14.29
Scheme for Fund for Regeneration of Traditional Industries (SFURTI) 260 241.08 -7.14
Khadi Gramodyog Vikas Yojana 917.69 1,037.19 +13
ASPIRE 22.23 20 -10.03
MSME Champions Scheme 52.72 54.72 +3.79
Prime Minister Employment Generation Programme (PMEGP) 2,700 2,300 -14.81
Credit Support Programme 500.08 0.04 -99.99
Guarantee Emergency Credit Line (GECL) Facility 14,100 9,812.93 -30.43
Distressed Assets Fund 0.04 0 -100
Credit Linked Capital Subsidy (CLCS) 1.06 0.55 -48.11
Procurement and Marketing Support Scheme 96.35 65 -32.54
Entrepreneurship cum Skill Development Programme (ESDP) 80 99 +23.75
Raising and Accelerating MSME Performance (RAMP) 1,170 1,170 0
Micro and Small Enterprise-Cluster Development Programme (MSE-CDP) 150 400 +166.67
Fund of Fund (FoF) Scheme 575 575 0
Mudra Loan Limit (Tarun Category) 10 lakh 20 lakh +100

MSMEs Registration Steps

Micro, Small, and Medium Enterprises (MSMEs) can benefit greatly from government schemes and incentives to support their growth and sustainability. Businesses must complete the MSME registration process to take advantage of these benefits. Here are the steps to guide you through the registration: Step 1: Gather Required Documents : Ensure you have all the necessary documents and information:
  • Aadhaar number
  • PAN number
  • Business address
  • Bank account number
  • Basic business activity
  • NIC 2-digit code
  • Details of investment
  • Details of turnover
  • Partnership deed (if applicable)
  • Copies of sales and purchase bills
  • Copies of bills and licenses for purchased machinery
Step 2: Visit the Udyam Registration Portal : Go to the official Udyam Registration website. Step 3: Enter Aadhaar Number : Enter your Aadhaar number and validate it with the OTP sent to your registered mobile number. Step 4: Fill in Business Details : Provide details about your business, including name, type of organisation, PAN number, business address, and bank account information. Step 5: Specify Business Activity : Enter the basic business activity and the NIC 2-digit code related to your industry. Step 6: Provide Investment and Turnover Details : Enter the details of your investment in plant and machinery or equipment and your annual turnover. Step 7: Upload Documents : Upload the necessary documents, such as the partnership deed (if applicable), copies of sales and purchase bills, and bills and licenses for purchased machinery. Step 8: Submit the Application : Review the information you entered and submit your application. Step 9: Receive Udyam Registration Certificate : After successful submission, you will receive the Udyam Registration Certificate, which includes a QR Code to access your enterprise details. Note : There are no fees for MSME registration, and proof of documents is not required. The Udyam Registration Portal, integrated with Income Tax and GSTIN systems, will automatically retrieve PAN and GST-linked details on investment and turnover from government databases. GST registration is not mandatory for enterprises that do not require it, but those that need GST registration must provide their GSTIN to obtain MSME Registration.
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MSME Registration Required Documents

Certain documents and information are required to complete the MSME registration process. These documents help verify the business details and ensure they meet the eligibility criteria for MSME benefits. Here is a list of the necessary documents for MSME registration:
  • Aadhaar number
  • PAN number
  • Business address
  • Bank account number
  • Basic business activity
  • NIC 2-digit code
  • Details of investment
  • Details of turnover
  • Partnership deed
  • Copies of sales and purchase bills
  • Copies of bills and licenses for purchased machinery
There are no fees for MSME registration; proof of documents is not required. The Udyam Registration Portal, integrated with Income Tax and GSTIN systems, will automatically retrieve PAN and GST-linked details on investment and turnover from government databases. GST registration is not mandatory for enterprises that do not require it. However, businesses that must obtain GST registration under GST law must provide their GSTIN to obtain MSME or Udyam Registration.

MSME Registration Eligibility

All manufacturing, service industries, wholesale, and retail trade businesses that meet the revised MSME classification criteria for annual turnover and investment are eligible to apply for MSME registration. Therefore, MSME registration eligibility is determined by an entity’s annual turnover and investment. The following entities can register for MSME:
  • Individuals, startups, business owners, and entrepreneurs
  • Private and public limited companies
  • Sole proprietorships
  • Partnership firms
  • Limited Liability Partnerships (LLPs)
  • Self Help Groups (SHGs)
  • Co-operative societies
  • Trusts
MSME Registration Certificate The Ministry of MSME issues an e-certificate, the Udyam Registration Certificate, to MSMEs in India. Entrepreneurs receive this certificate upon completing the MSME registration process. The certificate includes a QR Code, which allows access to the enterprise's details. MSME Registration Number An enterprise with an MSME registration is known as Udyam, and the Ministry of MSME assigns a permanent identity number called the ‘Udyam/MSME Registration number’. The MSME Registration Certificate will include the 19-digit MSME/Udyam Registration Number.

New Credit Guarantee Scheme as Per MSMEs Budget 2024-25

The MSME Credit Guarantee 2024–25 has proposed a new credit guarantee scheme to facilitate term loans for MSMEs to purchase machinery and equipment without requiring collateral or third-party guarantees. This MSME Scheme launched by MSMEs Budget 2024-25 will pool the credit risks of these MSMEs with a separately constituted self-financing guarantee fund, providing each applicant with guarantee coverage of up to ₹100 crore. However, the loan amount may be larger. Industry representatives expect the announced measures, including enhancing MUDRA loan limits and introducing the new credit guarantee scheme, to incentivize financial entities to lend to small entrepreneurs while ensuring broader MSME Financial Allocation 2024–25 inclusion and stability.

MSMEs in the Indian Economy

Micro, Small, and Medium Enterprises (MSMEs) are vital to India's economy, contributing to GDP, exports, and employment. According to the Udayam portal, MSMEs employ more than two crore people, and the government aims to increase that number to 15 crore in the coming years. MSMEs also account for about 46% of India's total exports and one-third of its manufacturing output. Here's some more information about MSMEs in Indian economy
  • GDP : MSMEs contribute more than 29% to India's GDP. According to the Ministry of Statistics & Programme Implementation (MOSPI), the share of MSME Gross Value Added (GVA) in India's GDP was 30.5% in 2019–20, 27.2% in 2020–21, and 29.2% in 2021–22.
  • Exports : MSMEs account for about 46% of India's total exports. According to the Directorate General of Commercial Intelligence and Statistics (DGCIS), the share of MSME-related products in India's total exports was 48.10% in 2018–19.
  • Manufacturing : MSMEs are responsible for about one-third of India's manufacturing output.
  • Rural development : MSMEs also play a role in developing backward and rural areas.

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MSMEs Budget 2024-25 FAQs

What does MSME stand for?

MSME stands for Micro, Small, and Medium Enterprises. These businesses play a crucial role in economic growth and development.

What constitutes the MSME industry?

The MSME industry includes micro, small, and medium enterprises involved in services, manufacturing, processing, production, and the preservation of goods.

What is the primary aim of MSMEs?

The main goal of MSMEs is to manufacture, process, produce, and preserve goods and commodities.
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