In the general budget, many gifts have been given to micro, small and medium entrepreneurs (MSMEs). The business and investment limit fixed for these entrepreneurs with guarantee to increase the availability of loans to their definition has been increased. Also, a credit card has been announced for micro entrepreneurs. Provisions have also been made in the budget for the first time entrepreneurs. In the budget of FY 2026, an allocation of Rs 23,268 crore has been made for the Ministry of MSME, which is more than Rs 17,306 crore for FY 25.
The limit of first credit guarantee cover for micro and small entrepreneurs was Rs 5 crore, a provision has been made to increase it to Rs 10 crore in the general budget. With the increase in credit guarantee cover, additional loans will be available to micro and small entrepreneurs in the next 5 years. The credit guarantee cover limit for startups has been increased from Rs 10 crore to Rs 20 crore. The general budget provides for issuing credit cards for micro entrepreneurs. The Finance Minister said in the budget speech that we will start a special credit card with a limit of Rs 5 lakh to the micro entrepreneurs registered on the enterprise portal. 10 lakh credit cards will be issued in the first year.
A new scheme has been announced for the first time entrepreneurs in the general budget. The budget speech states that a new scheme will be started for 5 lakh women, scheduled castes and scheduled tribes entrepreneurs. This will provide a fixed loan of up to Rs 2 crore during the next 5 years. Online capacity building programs for entrepreneurship and managerial skills will also be organized. The budget has announced to increase investment and business limit for MSME.
Finance Minister Sitharaman said that with the objective of assisting MSMEs to facilitate more widespread efficiency, technology upgradation and better access to capital, classification for all MSMEs related to all MSMEs related and business boundaries up to 2.5 and 2 times respectively Has been extended. Investment limit for micro industry has been increased from one crore to 2.5 crore, 10 crore for a small to 25 crores and Rs. 50 crore for medium to Rs 125 crore.
In the general budget, it is proposed to increase this limit from 5 crore to 10 crores, 50 crore for small and Rs 250 crore for medium to Rs 500 crore for the micro in terms of trading. The industry believes that the increase in investment and business limit will improve the recovery of money from defaulter buyers. DP Goel, co-chairman of the MSME Committee of PHD Chamber of Commerce and Industry, said that this new change will affect more than 2 crore SMEs. The MSME Act 2006 empowers micro and small scale industries to recover money within 45 days.
Failure to do so, the buyer has to pay 3 times the bank interest for the default period. With the increase in the limit, more industries will be included in SMEs. Which will improve the financial health of micro and small scale industries. In the budget, the guarantee fee for loans in 27 focus areas important for self -reliant India has been reduced by 1 percent.