29 March, 2025 | 11:01 IST
The Union Budget 2025 introduced key measures to strengthen the Micro, Small, and Medium Enterprises (MSME) sector and promote the Make in India initiative. With 5.93 crore registered MSMEs providing livelihoods to over 25 crore people, the Budget focused on easing credit flow, accelerating digital adoption, and implementing pro-business reforms to enhance competitiveness and drive sustainable growth.
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The Startup Credit Guarantee scheme is a government initiative aimed at providing collateral-free loans to startups, ensuring they have easier access to institutional credit. Startups often face difficulties in securing funding due to a lack of tangible assets or an established credit history. Recognising this, the government has introduced this initiative to facilitate their financial needs without burdening them with stringent collateral requirements.
Revised MSME classification criteria
Investment and turnover limits for MSMEs have been increased by 2.5 times and 2 times, respectively, enabling businesses to scale operations and improve efficiency.
Improved credit access
Support for micro enterprises and startups
Extended tax benefits for startups
Under Section 80-IAC, startups incorporated on or after April 1, 2016, but before April 1, 2025, were eligible for a 100% tax deduction on profits. This benefit has now been extended by five years, covering startups incorporated before April 1, 2030.
Revised MSME classification criteria
The government has updated the investment and turnover thresholds for MSMEs, offering broader growth opportunities:
| Category | Investment (₹ in Cr) | Turnover (₹ in Cr) |
| Micro | 1 – 2.5 | 5 – 10 |
| Small | 10 – 25 | 50 – 100 |
| Medium | 50 – 125 | 250 – 500 |
PM Vishwakarma Scheme
Udyam registration portal
Prime Minister’s Employment Generation Programme (PMEGP)
Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
To sum up, the business ventures registered under the Department of Promotion of Industry and Internal Trade (DPIIT) as startups can receive the benefits of the Credit Guarantee Scheme for Startups. The loans can be availed from the participating Member Institutions (MIs). The scheme could be helpful for emerging businesses, especially the micro, small and medium enterprises (MSMEs), for funding. However, the startups should evaluate the loan options and interest rates before availing any financial assistance under the scheme.
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