Key measures, including an expanded Credit Guarantee Scheme, higher Mudra loan limits, position India as a powerhouse for entrepreneurship and self-reliance

The Union Budget 2025 has laid a strong foundation for a transformative leap in India’s startup and MSME ecosystem. At a time when entrepreneurship is fueling economic growth and job creation, the government has introduced a series of strategic measures aimed at fostering financial inclusion, innovation, and global competitiveness.

A key highlight of this budget is the enhanced access to capital. The expansion of the Credit Guarantee Scheme will enable MSMEs and startups to secure funding without collateral, addressing a significant challenge for emerging businesses. Additionally, the substantial increase in the Mudra loan limit will allow early-stage entrepreneurs to scale their ventures without financial constraints. Simplified tax structures, reduced corporate tax rates, and streamlined GST compliance will further ease cash flow issues, enabling businesses to reinvest in growth.Beyond financial incentives, the budget embraces a futuristic vision by integrating infrastructure development with digital transformation. The allocation for plug-and-play industrial parks and logistics hubs will provide businesses with ready-to-use infrastructure, significantly reducing setup costs and expediting time-to-market.

The establishment of e-commerce export hubs will open new global opportunities, particularly benefiting sectors such as manufacturing, agritech, and handicrafts. Furthermore, a renewed focus on AI-driven automation and deep-tech innovation ensures that Indian startups remain competitive on a global scale.

A crucial aspect of this budget is its emphasis on regulatory simplification and skill development. By easing compliance norms, streamlining FDI regulations, and encouraging private sector collaboration in skilling initiatives, the government is fostering an environment where startups can concentrate on scaling rather than navigating bureaucratic complexities. These measures position India as a dynamic startup hub, reinforcing the vision of Atmanirbhar Bharat.

Ankit Kumar, CEO of Skye Air, lauded the government’s initiatives, stating, “The Union Budget 2025 strengthens India’s startup and MSME ecosystem with a Rs 10,000 crore fund, ensuring better access to capital and innovation support. Simplified tax structures and compliance reforms will further ease operations, fostering growth and scalability. By integrating digital infrastructure with financial incentives, the budget paves the way for startups and MSMEs to expand, innovate, and compete globally.”

The budget also provides a significant boost to innovation and research.

The extension of the period of incorporation for startups by five years is expected to encourage entrepreneurship. Additionally, the allocation of Rs 20,000 crore to support private-sector-driven research and infrastructure expansion at IITs will create a fertile ground for technological advancements.

The introduction of the Credit Guarantee Startup Scheme (CGSS) and the Customised Credit Card for Micro Enterprises (ME-Card) will improve access to credit for startups and MSMEs, fueling growth and development. Ashish Gupta, CEO of Fretbox, remarked, “The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) will facilitate collateral-free loans, giving a major boost to the manufacturing sector. These initiatives will empower the next generation of entrepreneurs, researchers, and innovators, and we look forward to seeing the tangible results of these efforts.”

By enhancing geospatial data capabilities, this initiative will equip businesses with better insights for logistics, infrastructure, and resource management.  Saurabh Rai, CEO of Arahas Technologies, highlighted its impact: “Leveraging AI and advanced computing, startups can drive innovation in sectors like agritech, smart mobility, and climate tech. The mission’s open data-sharing framework will reduce dependency on foreign sources, fostering self-reliance and accelerating growth.”

The budget also prioritizes boosting exports and manufacturing. Dr. Mahesh Gupta, CMD of Kent RO, praised the initiatives, saying, “By facilitating easy access to export credit, cross-border factoring support, and tackling non-tariff measures, the government is addressing critical pain points for exporters.

The customized credit cards for MSMEs, fund of funds for startups, and expanded fund-of-funds will undoubtedly improve capital access and stimulate growth. Enhancing investment and turnover limits for MSMEs will also provide a much-needed boost to their operational efficiency.”

Overall, the Union Budget 2025 signals a bold commitment to making India a global leader in entrepreneurship, technology, and innovation.

(The author is seniro technical writer at Ksolves, views are personal)