The Union Budget 2025-26 and Its Impact on MSMEs
The Union Budget 2025-26 presents a transformative vision for India’s MSME sector. It reinforces its role as a crucial pillar of economic growth. Strategic measures aim at expanding credit access, fostering first-time entrepreneurs, and promoting labour-intensive industries. The government is laying the groundwork for sustained industry innovation and infrastructure growth.
Additionally, expectations for industrial parks, supply chains, and warehouses are rising. This is because India has strengthened its position as a global manufacturing powerhouse.
Strengthening MSMEs: Key Budgetary Provisions
Revised MSME Classification and Credit Access
To support scaling and efficiency, the budget increases the investment and turnover limits for MSME classification by 2.5 times and 2 times, respectively. This move encourages higher technological adoption, improved productivity, and employment generation.
Further, the credit guarantee cover for micro and small enterprises has doubled from ₹5 crore to ₹10 crore. This enables ₹1.5 lakh crore in additional credit over five years. Startups and exporter MSMEs will benefit from enhanced guarantee cover, with term loans up to ₹20 crore available to boost global competitiveness.
A new Credit Card scheme provides ₹5 lakh in credit to micro-enterprises registered on the Udyam portal, ensuring easier access to working capital. This initiative aligns with the broader vision of building green businesses.
This leads to industry innovation and infrastructure development and empowers small players to adopt sustainable production practices.
Entrepreneurship and Industry-Specific Support
Encouraging First-Time Entrepreneurs
The introduction of a ₹10,000 crore Fund of Funds will strengthen financial support for startups, particularly in priority sectors. Furthermore, 5 lakh women, Scheduled Caste and Scheduled Tribe entrepreneurs, will receive term loans up to ₹2 crore over five years. These steps ensure greater participation in job creation and economic development, contributing to industry innovation and infrastructure.
Sector-Specific Growth Initiatives
- Footwear & Leather Industry: The Focus Product Scheme is set to create 22 lakh jobs. The forecast also indicates that it can generate upto ₹4 lakh crore in revenue.
- Toy Industry: Cluster development and skill-building initiatives will position India as a global toy manufacturing hub.
- Food Processing Industry: A new National Institute of Food Technology, Entrepreneurship and Management in Bihar will enhance value addition and employment.
These reforms are expected to attract logistics parks, facilitating smoother supply chain integration and market expansion.
The Role of Industrial Parks in Industry Innovation and Infrastructure
With the rising demand for manufacturing hubs, industrial parks are expected to play a crucial role in enabling MSMEs to scale efficiently. The budget promotes land investment in strategically located industrial plots, supporting long-term growth.
Simultaneously, logistics parks will streamline transportation, warehousing, and supply chain operations, enhancing cost efficiency for MSMEs. Well-connected logistics parks ensure smooth movement of goods, reducing turnaround times and improving global competitiveness.
Magna Star Industrial & Logistics Park, a Manafuli Group company, prepares to drive large-scale infrastructure development. This in turn will create new opportunities for industry innovation and infrastructure.
This will significantly support businesses to expand and enhance manufacturing efficiency. Eventually, it will help in making India a leading player in the global supply chain.
Building a Circular Economy with Green Businesses
A major thrust of the budget is on sustainability, pushing the transition towards a circular economy. Key measures include:
- Promoting green businesses that minimize waste and reduce environmental impact.
- Encouraging clean tech manufacturing with policy support under the National Manufacturing Mission.
- Boosting domestic production of solar PV cells, EV batteries, and wind turbines.
These initiatives align with India’s commitment to industry innovation and infrastructure. This will guarantee that industrial growth does not come at the cost of environmental sustainability.
The government’s vision is to create an ecosystem where green businesses flourish, contributing to long-term economic resilience.
Expanding MSME Market Reach and Export Growth
With MSMEs contributing 45.73% of total exports in 2023-24, the budget strengthens their access to global markets.
Magna Star intends to serve as a key enabler for export-driven growth. This will integrate MSMEs into global supply chains by delivering rightfully positioned industrial plots. The development of industrial parks ensures seamless connectivity, reducing lead times for exports and making Indian MSMEs more competitive.
Public Procurement Policy initiatives also continue to support MSMEs, mandating 25% procurement from micro and small enterprises by Central Ministries and CPSEs. This move enhances business opportunities and strengthens domestic production capabilities.
Conclusion: A Stronger Future for MSMEs
The Union Budget 2025-26 provides a well-rounded strategy to empower MSMEs by addressing credit accessibility. This will foster entrepreneurship investing in industry innovation and infrastructure. The focus on industrial parks and environment-friendly businesses highlights the government’s commitment to sustainable, scalable growth.
Magna Star Industrial & Logistics Park and other Manafuli projects, such as CWBTA Magna Business Park, Manafuli Industrial Park Bagnan, and Manafuli Industrial Park Pailan, will drive key manufacturing and infrastructure projects.
This can push for a circular economy ensuring long-term sustainability. With proactive measures and strategic investments in industrial plots, MSMEs are set to thrive, reinforcing India’s position as a global industrial leader.