MSME Classification Revised; Enhanced Support in Union Budget 2025

Finance Minister Nirmala Sitharaman, in the Union Budget 2025, revised the MSME classification by increasing investment and turnover limits. The budget also enhances credit support, including a ₹10 crore guarantee, and introduces customised credit cards for micro-enterprises.

Revised MSME Classification Criteria

In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced revised criteria for classifying Micro, Small, and Medium Enterprises (MSMEs). The changes aim to bring more businesses under the MSME definition, supporting growth and employment.

The revised criteria for investment and turnover limits will be significantly increased. For micro-enterprises, the investment limit will rise from ₹1 crore to ₹2.5 crore, while the turnover cap will increase from ₹5 crore to ₹10 crore.

For small enterprises, the investment limit will go up to ₹25 crore from ₹10 crore, with turnover increased to ₹100 crore from ₹50 crore. Medium enterprises will now be classified with an investment limit of ₹125 crore, up from ₹50 crore, and a turnover limit of ₹500 crore, up from ₹250 crore.

Empowering MSMEs for Growth and Competitiveness

These changes are designed to help MSMEs scale their operations, upgrade technology, and gain better access to capital. By doing so, the government aims to boost the efficiency and global competitiveness of the sector, which already plays a crucial role in India’s manufacturing output and exports.

Currently, over 1 crore registered MSMEs employ 7.5 crore people and contribute to 36% of India’s manufacturing and 45% of its exports.

Enhanced Support for MSMEs in Budget 2025

In her speech, Finance Minister Nirmala Sitharaman highlighted that over 1 crore registered MSMEs in India employ approximately 7.5 crore individuals and contribute to 36% of the country’s manufacturing.

To further support these enterprises, the government announced an increase in credit guarantee cover, raising it from ₹5 crore to ₹10 crore. Additionally, well-established exporter MSMEs will be eligible for term loans up to ₹20 crore.

The Finance Minister also revealed plans to introduce customised credit cards for micro-enterprises. “We will introduce customised Credit Cards with a ₹5 lakh limit for micro-enterprises registered on the Udyam portal. In the first year, 10 lakh such cards will be issued,” she said.

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