B2B Market Media | The Founder Media has been speaking with people, a lot of people, since the past two days about what they expect from the Union Budget 2025. Given that this is the eighth time (and that is impressive) Financial Minister (FM) Sitharaman is delivering India’s budget, expectations were high, indeed.
We spoke with Arjun Singhal, Founder, Blowtrumpet, and his thoughts summed up what other MSMEs and start-up founders had told us.
“Start-up founders are hoping the union government will build on the recent reduction in the Tax Deduction at Source (TDS) rate for e-commerce operators from one per cent to 0.1 per cent, effective 1st October, 2024, in the budget. They expect further measures to ease their tax burden and promote better compliance.”
And Sitharaman did not disappoint!
Let us first put it in a nutshell to build the tempo… MSMEs and startups to benefit from increased credit guarantee coverage; customised credit card introduced for micro units.
Singhal said, “This is just the boost the MSME–startup sector of the country needed. More, much more, encouragement is needed, but this is a very good start.”
Now that we have your attention, let’s elaborate.
In her budget speech, the FM announced an increase in credit guarantee cover under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for MSMEs and startups to improve their access to formal credit. For micro and small enterprises, the cover has been raised from Rs 5 crore to Rs 10 crore, unlocking an additional Rs 1.5 lakh crore in credit over the next five years.
For startups, the credit guarantee cover has been doubled from Rs 10 crore to Rs 20 crore, while the guarantee fee has been reduced to just one per cent for loans in 27 key sectors.
Additionally, the FM introduced a plan to roll out customised credit cards for micro enterprises registered on the Udyam portal, with a limit of guarantee fee that has been reduced to just one per cent. A total of 10 lakh such cards are expected to be issued in the first year.
sudeep@thefoundermedia.in
