Budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing
In a significant move aimed at bolstering the Small and Medium Enterprises (SME) and Micro, Small and Medium Enterprises (MSME) sectors, Finance Minister Nirmala Sitharaman announced on Tuesday a substantial increase in the Mudra Loan limit. The limit for loans in the Tarun category will be raised from Rs.10 lakh to Rs.20 lakh.
Sitharaman highlighted that the increase in the loan limit under the Tarun category will cater specifically to entrepreneurs looking to scale up their existing businesses. This move is anticipated to stimulate job creation and economic activity, especially in rural and semi-urban areas where small enterprises play a vital role in livelihood generation.
Sitharaman said, “Budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. New mechanism announced for facilitating continuation of bank credit to MSMEs during their stress period.”
Under the Pradhan Mantri Mudra Yojana (PMMY), scheme by banks and microfinance institutions (MFIs) Loans are extended in three categories: Shishu (loans upto Rs.50,000); Kishore (loans from Rs.50002 to Rs.5 lakh) and Tarun (loans from Rs.5 lakh to Rs.10 lakh). However, after the Budget 2024 announcement, the Mudra loan under the Tarun category will be hiked to Rs.20 lakh.
The PMMY scheme, which stands for Micro Units Development and Refinance Agency, aims to facilitate loans to non-corporate, non-farm small/micro enterprises.
Mudra Loan scheme was launched by the Modi government in April 2015 to provide loans up to Rs.10 lakh to non-corporate, non-farm small/ micro enterprises.
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