Union Budget 2025: Empowering MSMEs with enhanced credit & growth opportunities

The Union Budget for 2025-26, presented by Finance Minister Nirmala Sitharaman, has sparked widespread reactions from various sectors of the economy. As the government outlines its plans to propel India towards becoming a Viksit Bharat, the budget has been met with a mix of optimism, scrutiny, and anticipation. Key announcements focusing on sectors like MSMEs, education, tax reforms, and sustainability have drawn attention from businesses, industry experts, economists, and the general public. The budget's focus on boosting economic growth, fostering innovation, and empowering the middle class aims to strike a balance between long-term vision and immediate relief, igniting discussions on the government’s strategy to navigate global challenges while fueling domestic prosperity. Here’s a look at the various reactions and what the budget means for India’s future trajectory.

Mayuresh Raut, Managing Partner, Seafund said "The increase in credit guarantee for startups from Rs 10 crore to Rs 20 crore is a much needed demand that has been finally accepted. This will not only enable startups to have access to debt capital it will also help them scale faster with less equity dilution. Hence, it will lead to a virtuous cycle of higher top line, less equity dilution, better valuation and better fundraise. As the budget commenced, the FM highlighted that they would like to see 70% women participation in economy building, thus, the addition to credit guarantee will ensure a timely boost as more women entrepreneurs is the need for our ecosystem.

With regards to the earlier 3 Centers of Excellence, this along with Krishi Dhan Dhanya program will bring the best of AI practices to the agri-tech startups ecosystem and breed further innovation. Our view is that this requires large patient capital, but aligns us with the renaissance and renewed interest in nuclear energy that is happening all over the world, led by the US. Definitely opens the sector to private investors. Push for data centres consuming huge powers will need nuclear power which will further fuel our AI aspirations"

Budget Reaction Quote by Mukul Goyal, Co-Founder of Stratefix Consulting said, "The Union Budget 2025 has rightly emphasized the pivotal role of MSMEs in India's economic landscape. With over one crore registered MSMEs contributing approximately 36% to our manufacturing output and 45% to exports, their significance cannot be overstated.

The government's decision to enhance the investment and turnover thresholds for MSME classification is a commendable move. This adjustment will enable more enterprises to avail MSME benefits, fostering growth and competitiveness. Additionally, the increase in credit guarantee cover for micro-enterprises from ₹5 crore to ₹10 crore is a significant step. This initiative is expected to inject an additional ₹1.5 lakh crore in credit over the next five years, empowering small businesses to invest in innovation and expansion.

However, while these measures are promising, it is crucial to address the persistent challenges that MSMEs face. Access to timely and affordable credit remains a hurdle for many small businesses. Streamlining the loan disbursement process and reducing bureaucratic red tape are essential to ensure that the intended benefits reach the grassroots level.

Furthermore, the emphasis on digitization and technology adoption is a welcome move. Encouraging MSMEs to integrate digital tools can enhance operational efficiency and open new market avenues. Providing incentives for technology adoption and digital literacy programs will be instrumental in this transition.

In conclusion, the Union Budget 2025 lays a solid foundation for strengthening the MSME sector. By addressing the existing challenges and building on the proposed initiatives, we can look forward to a more robust and resilient MSME ecosystem, driving India's journey towards becoming a global manufacturing hub."

Roshan Aslam, Co-founder & CEO of GoSats, believes the Union Budget 2025 offers a unique outlook for the growth of Indian startup ecosystem, as he said, “The Union Budget 2025 outlines a clearly defined future for India’s growing startup ecosystem by extending critical policies. The announcement of an additional ₹10,000 crore Fund of Funds will be a critical boost for the growth of India’s startup ecosystem in FY 25-26. As the investment limit for MSME classifications are made 2.5 times and the turnover limits doubled, this will help the financial viability of startup businesses in the country. As easier credit lines are extended to MSMEs, it will provide the essential confidence to grow and generate employment opportunities, directly contributing towards the growth of the Indian Economy."

Ambika Sharma, Founder & Chief Strategist, Pulp Strategy said,“The Union Budget 2025 presents a forward-looking approach to digital transformation, MSME growth, and AI-driven innovation. The emphasis on AI research, deep-tech investments, and startup funding signals a positive shift towards a more technology-driven economy. The reduction in personal income tax slabs is likely to improve consumer spending, creating new opportunities for brands to refine their marketing strategies and drive demand.

For digital and MarTech agencies, the focus on MSMEs, women entrepreneurs, and credit enhancement opens avenues for business expansion and partnerships. Additionally, the easing of FDI in select sectors will drive increased investment, potentially boosting digital advertising, AI-driven automation, and customer engagement strategies. This budget underscores the need for businesses to integrate AI and automation at scale, ensuring efficiency, personalization, and data-driven marketing that aligns with India’s evolving digital economy.

Also Read: Union Budget 2025-26: Personal income tax reforms focus on middle-class relief