The Union Budget 2025, presented yesterday, has set the stage for interesting times ahead, particularly for the robust yet often-underestimated engine of our economy – the Micro, Small, and Medium Enterprises (MSMEs). Finance Minister Nirmala Sitharaman’s announcements signal a clear intent to fuel this sector, alongside a significant push for technology and innovation, aiming for a ‘Viksit Bharat’ by 2047.

MSME Boost Fuels Growth Engine

The Budget has unveiled a multi-pronged approach to bolster MSMEs. The enhancement of investment and turnover limits is a welcome move, essentially broadening the scope for these enterprises to grow without immediately losing their classification benefits. Currently contributing significantly to manufacturing and exports, MSMEs are set to receive further impetus through customised credit cards with a ₹5 lakh limit for micro-enterprises and a doubled credit guarantee cover, now at ₹10 crore. This financial oxygen is crucial. For years, access to timely and adequate credit has been a major hurdle for smaller businesses. These measures could genuinely unlock growth, allowing them to scale operations, adopt better technologies, and create more jobs. The ripple effect on the economy could be substantial, especially given the sector’s vast employment potential and contribution to manufacturing.

Tech and Innovation Take Centre Stage

Beyond MSMEs, the Budget’s emphasis on technology and innovation is equally noteworthy, as highlighted in a report analysing the key features. The continuation of the R&D fund, now augmented to ₹20,000 crore, alongside new Centres of Excellence in AI and a deeptech fund of funds, indicates a serious commitment to fostering a robust innovation ecosystem. The focus on establishing Global Capability Centres (GCCs) in tier-2 cities is a smart move, decentralising growth and tapping into the talent pool beyond the usual metropolitan hubs. These initiatives are not just about keeping pace with global technological advancements; they are about carving a unique space for India in the future tech landscape. By nurturing innovation and making it more accessible, the Budget is essentially sowing the seeds for long-term economic competitiveness and resilience.

Will these budgetary promises translate into tangible outcomes? The success hinges on effective implementation and a collaborative spirit between government, industry, and entrepreneurs. If execution matches the ambition, we could witness a significant upswing in both the MSME sector and the broader innovation landscape, propelling India closer to its ‘Viksit Bharat’ vision.