The Union Budget of the financial year 2025-26, introduced by Finance Minister Nirmala Sitharaman, contains many facets. On the one hand, it has changed the course of the taxation system for the working class and on the other hand, people are intrigued to know more about how the union budget has changed things for startups and MSME (Micro, small and medium enterprises) in India. But can aspiring entrepreneurs gather from the union budget, and how should their entrepreneurial trajectory be?
Impact of union budget on startups and MSMEs
If you are also seeking answers to the questions mentioned or those related to the impact that the union budget will have on startups specifically, then read on to find a detailed analysis of the impact.
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Better access to credit facilities
With a realisation that entrepreneurship drives the course of an economy, the finance ministry is all setto maximise the credit and investment limits for young and aspiring entrepreneurs in micro and small enterprises. A new scheme will be introduced especially for entrepreneurs from disadvantaged sections, providing them with the apt and required financial support to build successful startups. Mostly, all that micro startups from underprivileged backgrounds require is a kind of financial nudge, and this year's union budget is ready to give that to young minds with a vision to build a startup. The credit guarantee cover for micro and small enterprises has been increased from ₹5 crore to ₹10 crore, enabling additional credit of ₹1.5 lakh crore over five years.
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Better access to resources
MSMEs have significantly boosted the Indian economy. With 5.93 crore registered MSMEs employing more than 25 crore people, these enterprises generate a significant share of the country’s economic output. The idea behind the union budget is to provide startups with a platform to access the required resources. This better access to resources will boost the speed of their production and sales of the startup and increase the entrepreneur’s morale.
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Credit Cards for micro enterprises in MSME’S
Another scheme in the Union budget has sought to introduce customised credit cards for micro-enterprises. These credit cards will provide entrepreneurs with up to Rs. 5 Lakh, but only to startups registered under the Udyam Portal.
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Financial support for first-time entrepreneurs
Additionally, the union budget has special consideration for the startups and enterprises with a total fund of Rs. 10.000 Crore to expand support for startups seeking finances. There is also a scheme specifically designed to push women entrepreneurs from disadvantaged sections of society. These disadvantaged sections include those of schedules castes, schedules tribes and OBCs. The idea is to reduce their double burden because women of these sections are denied opportunities based on both their gender and caste. They deserve a platform to portray their entrepreneurial skills through the medium of their startups, and the union budget considers them as precious entrepreneurs of society.
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Specialised focus on labour-intensive sectors
The government has made sure that through the budget of 2025-26, the focus is not just on the top tier of society. Still, more and more emphasis is also laid on how vital labour is for the functioning of a labour-intensive startup. The government has launched a focus product scheme in this regard. This scheme focuses on the footwear and leather industry to support the design and manufacturing of leather and non-leather goods. The positive and hope-generating part about this scheme is that it promises to create 22 lakh job opportunities for the labour and working class.
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Toy manufacturing Industry
Along with leather and non-leather goods, the government has also paid a sense of importance to the toy sector by laying significant importance upon developing better and innovative toys, thereby making india a global hub of the toy industry. The idea is to excel in not just one sector but to enhance and shift the focus of people's views of industry-specific startups.
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Policy support and road maps
The government has developed the Natural Manufacturing Mission through the medium of the Union budget for the financial year beginning from 1st April 2025. This mission aims to provide MSME with policy support and road maps under the Make in India Initiative.
These were some of the steps taken by the government for MSMEs so that startups are given significant emphasis and thrive in a competitive and blooming environment. With an increase in credit opportunities and many different initiatives and plans, the union budget aims to give entrepreneurship its due reverence.
