Union Budget 2025-26 has set the stage for a bold transformation across India’s business landscape. This year’s announcements promise a radical shift through streamlined licensing, tax incentives for emerging sectors, and a push for digital transformation. With the government’s renewed commitment, MSMEs now have a golden opportunity to expand and innovate.
But how will these reforms impact businesses? Can they help MSMEs grow faster, operate smoothly, and compete globally? Let’s break it down.
- Revised MSME Classification
The revised classification expands eligibility by increasing investment limits by 2.5 times. This move brings more businesses under the MSME umbrella, ensuring better access to incentives, financial aid, and growth opportunities. This will also make it easier for enterprises to grow without losing MSME benefits.
- Government-Backed Support For Startups
The government’s ₹10,000 crore Fund of Funds is set to empower startups and innovative MSMEs with better funding opportunities. This initiative will fuel scalability, strengthen global competitiveness, and drive economic growth, ensuring that emerging businesses have the necessary financial support to expand in competitive markets.
With such MSME-friendly reforms, now is the perfect time to grow your business. South Indian Bank’s Small Business Loan offers quick approvals, attractive rates, and easy repayment options, helping entrepreneurs scale faster and propel their business forward.
- Supporting Micro Enterprises
Udyam-registered micro enterprises will get customized credit cards with a ₹5 lakh limit. The first year will see 10 lakh cards issued.
- Measures For Labor Intensive Sectors
The government has introduced a Focus Product Scheme for the footwear and leather sectors, aiming to create 22 lakh jobs, ₹4 lakh crore turnover, and ₹1.1 lakh crore in exports. The initiative also aims to develop clusters, enhance skills, and build a strong manufacturing ecosystem for producing high-quality, innovative, and sustainable 'Made in India' toys.
- Simplified Business Initiatives
MSMEs will benefit from a high-level committee focused on reducing regulatory burdens, streamlining compliance, and enhancing trust-based governance. This initiative aims to create a more supportive business environment, ensuring smooth operations, fewer obstacles, and greater opportunities for small and medium enterprises to grow.
- Supporting Women Entrepreneurs
Women entrepreneurs from Scheduled Castes and Tribes will receive up to ₹2 crore in term loans, along with online training. This initiative supports 5 lakh first-time businesswomen, fostering gender inclusivity and enabling them to build ventures with financial and skill-based empowerment.
Union Budget 2025-26 signals a transformative phase for Indian businesses, enabling growth through policy support, financial aid, and innovation-driven initiatives.
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