In the Budget 2024, Micro, Small, and Medium Enterprises (MSMEs) will now be able avail loans of up to Rs 20 lakh instead of the current Rs 10 lakh under the Mudra scheme, finance minister Nirmala Sitharaman said on Tuesday. This is also applicable to those who have successfully repaid loans previously taken under the Tarun category.
The finance minister further said that credit availability for MSMEs during their stressed period will be provided from the government-promoted fund.
The turnover threshold of buyers for mandatory onboarding on the TReDS platform will be slashed from Rs 500 crore to Rs 250 crore, she added. The Budget also has provisions for financially supporting 50 multi-product irradiation units in the MSME sector.
Sitharaman was presenting the budget for the third term of the Narendra Modi government. The theme of this year’s budget focuses on employment, skilling, MSMEs and the middle class, she said.
During the interim budget presentation earlier this year, the government extended 43 crore loans aggregating to Rs 22.5 lakh crore under the PM Mudra Yojana.
What is Mudra Loan Scheme?
Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.
MUDRA products include ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur. The financial limit for these schemes are: up to Rs 50,000 under the Shishu category, 50,000 to 5 lakh under Kishor category and 5 lakh to 10 lakh under the Tarun category.
Loans under PMMY are provided by Member Lending Institutions (MLIs) — banks, non-banking financial companies (NBFCs), microfinance institutions (MFIs) and other financial intermediaries.
Those eligible for assistance from MUDRA include Non-Corporate Small Business Segment comprising millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
What are the Objectives of MUDRA?
To sanction loans up to Rs 10 Lakh to those who have a business plan to generate income from a non-farm activity like manufacturing, processing, trading, or service sector but don’t have enough capital to invest.
To help generate sources of employment and increase the overall GDP by providing micro-enterprises with credit facilities.
With the help of MUDRA bank, the network of microfinance institutions will be monitored and new registration will also be done.
Integration of informal economy into formal sector will help India also grow its tax base as incomes from the informal sector are non-taxed.
Schemes For Supporting Other Activities
Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, scheduled tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Mission, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up, she said.
To improve the socio-economic condition of tribal communities, she said, “We will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting 5 crore tribal people.”
She also said SIDBI will open new branches to expand its reach to serve all major MSME clusters within three years and provide direct credit to them.
(with inputs from agencies)
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