New Delhi: The Union Budget 2025 marks a significant turning point for India’s Micro, Small, and Medium Enterprises (MSMEs) and startups, with a comprehensive set of proposals aimed at fostering growth, creating jobs, and driving innovation.
With a focus on financial support, ease of doing business, and skill development, this budget is poised to reshape the future of these critical sectors.
Job Creation and Skilling: A Top Priority
At the heart of the budget’s focus lies job creation, a theme that resonates across various sectors, particularly MSMEs and startups.
Kartik N, CEO of TeamLease, emphasized the importance of the budget in addressing the country’s employment challenge. “This budget has the potential to generate 30-40 lakh jobs, with targeted initiatives like EPFO incentives, skilling programs for 30 lakh youth, and internships for 1 crore young people,” Kartik said.
He believes these measures will significantly impact labour-intensive sectors like tourism, retail, and manufacturing, contributing to an inclusive and sustainable economy.
He also highlighted that the proposed tax reforms, aimed at increasing disposable income, would likely fuel consumer demand. “This, in turn, will lead to more hiring across industries, accelerating India’s journey towards becoming a global economic powerhouse,” he added.
A Strong Push for Startups and Innovation
The budget also takes bold steps to empower India’s startup ecosystem, a sector increasingly recognized as the backbone of innovation and entrepreneurship. Yamini Bhat, CEO and Co-founder of Vymo, welcomed the substantial push for startups, particularly the infusion of Rs 10,000 crore into the Fund of Funds (FoF).
“This expanded funding pool is crucial for startups, especially in high-tech sectors like B2B SaaS, enterprise technology, and fintech,” Yamini noted.
She further pointed out that the enhanced capital availability would not only help startups scale but also strengthen India’s position as a global startup hub.
“The scheme to support 5 lakh first-time women entrepreneurs, offering term loans of up to Rs 2 crore, along with online capacity-building programs, will create a more inclusive and diverse entrepreneurial ecosystem,” she emphasized.
Experts believe that the government’s initiatives to support startups will unlock a new wave of innovation. “These investments will pave the way for India to become a leader in global technological advancements,” said Saily Lad, CEO of Volksara Techno Solutions.
MSMEs: Scaling and Innovation at the Forefront
MSMEs, which are the backbone of India’s economy, received a boost through several targeted measures in the budget. The government has raised the investment and turnover limits for MSMEs, enabling them to expand operations while retaining their classification as MSMEs.
The enhanced credit facilities, such as the creation of customized credit cards for micro-enterprises, will provide much-needed financial support, especially for businesses in sectors like food processing, footwear, and toys.
“These measures, combined with the Rs 10,000 crore funding for MSMEs and startups, will foster innovation and help businesses grow,” said Varun Tangri, CEO of QueueBuster.
He also highlighted that the introduction of tailored credit solutions would provide smoother cash flow and open up new growth opportunities for MSMEs, which employ millions across the country.
Empowering Women and Marginalized Communities
Another standout feature of the budget is its emphasis on empowering women and marginalized communities, with Joyshree Das Verma, National President of FICCI FLO, applauding the government’s introduction of term loans for 5 lakh women entrepreneurs from SC/ST communities.
“This is a key step toward financial inclusion, offering resources to help women entrepreneurs launch and scale their businesses,” she said.
The budget’s focus on women’s empowerment is also reflected in initiatives like the Saksham Anganwadi and Poshan 2.0 programs, which aim to improve nutrition for vulnerable groups, including children, mothers, and adolescent girls.
Joyshree emphasized, “These measures lay the foundation for a healthier, more prosperous future for women and marginalized communities.”
A Vision for the Future: Scaling Through Innovation
As India continues to chart its path toward becoming a global innovation hub, the Union Budget 2025 aligns its efforts with this ambition. Ankit Aggarwal, Founder & CEO of Unstop, praised the allocation for the PM Internship Scheme, which will place young professionals in top companies across India, offering them structured, real-world exposure.
“This initiative will bridge the gap between education and employment, ensuring that India’s youth are equipped with the skills needed for future jobs,” Ankit said.
Additionally, Rishabh Goel, Co-founder & CEO of Credgenics, highlighted the government’s commitment to empowering startups and MSMEs through a Rs 10,000 crore boost to the Fund of Funds and increased credit guarantee limits.
“These measures will catalyze innovation and entrepreneurship across sectors while enabling small businesses to expand their reach and embrace new technologies,” Rishabh remarked.
Rohan Bhargava, Co-Founder of CashKaro, also welcomed the enhanced MSME investment and turnover limits, noting that this policy shift would create new opportunities for skilled talent. “It will help India strengthen its position as a global manufacturing hub, creating more jobs and fostering innovation,” he added.
The Union Budget 2025 sends a strong message of support for India’s MSMEs and startups, recognizing their critical role in driving economic growth, job creation, and innovation. With increased financial backing, enhanced credit facilities, and a focus on inclusive entrepreneurship, this budget provides the tools necessary for these sectors to thrive.
As experts from various fields have noted, the budget’s forward-thinking approach empowers businesses to scale, innovate, and contribute to India’s vision of becoming a global leader in innovation and entrepreneurship. The road ahead is promising, with these initiatives laying the foundation for a more dynamic, inclusive, and prosperous India.
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