Budget 2024: Highlights of Manufacturing And Services

Credit Guarantee Scheme for MSMEs

A key highlight of Budget 2024 is the introduction of a Credit Guarantee Scheme designed to facilitate term loans for MSMEs. This scheme allows MSMEs to purchase machinery and equipment without requiring collateral or a third-party guarantee. A newly established self-financing guarantee fund will back the scheme, providing a guarantee cover of up to Rs. 100 crore per applicant.

In-House Credit Assessment by Public Sector Banks

Public sector banks will enhance their capabilities by developing in-house systems to assess MSMEs for credit. This shift eliminates reliance on external assessments and includes the creation of credit assessment models that utilize the digital footprints of MSMEs, providing a more accurate reflection of their financial health.

Continued Credit Access During Stress Periods

To support MSMEs during challenging times, the government announced a new mechanism to ensure the continuation of bank credit during periods of financial stress. This initiative aims to provide businesses with the stability needed to navigate difficult financial situations.

Enhanced Mudra Loan Limits

The Mudra Loan Scheme under the 'Tarun' category sees a significant enhancement, with the loan limit increased from Rs. 10 lakh to Rs. 20 lakh. This increase applies to entrepreneurs who have successfully repaid previous loans, offering them additional financial support to scale their businesses.

Lower Turnover Threshold for TReDS Platform Onboarding

The turnover threshold for mandatory onboarding on the TReDS platform has been reduced from Rs. 500 crore to Rs. 250 crore. This adjustment brings more buyers into the platform, improving liquidity and cash flow for MSMEs by facilitating the financing of trade receivables.

Expansion of SIDBI’s Reach

The Small Industries Development Bank of India (SIDBI) will expand its presence by opening new branches across major MSME clusters over the next three years. This expansion will allow SIDBI to provide direct credit to MSMEs, enhancing their access to financial resources.

Support for Food Irradiation and Quality Testing

To further boost the MSME sector, the government will provide financial support to establish 50 multi-product food irradiation units. Additionally, 100 food quality and safety testing labs with NABL accreditation will be set up, ensuring that MSMEs in the food sector can meet high standards and expand their market reach.

E-Commerce Export Hubs

In a move to help MSMEs and traditional artisans tap into global markets, the government will establish E-Commerce Export Hubs under a public-private-partnership (PPP) model. These hubs will provide the necessary infrastructure and support for MSMEs to sell their products internationally.

Promoting Manufacturing and Services

Comprehensive Internship Scheme

The government will launch a comprehensive scheme aimed at providing internship opportunities to 1 crore youth over the next five years in the top 500 companies. This initiative includes an internship allowance of Rs. 5,000 per month and a one-time assistance of Rs. 6,000, fostering skill development and enhancing employability.

Investment-Ready Industrial Parks

To attract investment and stimulate industrial growth, the government will collaborate with states and the private sector to develop investment-ready “plug and play” industrial parks. These parks will offer businesses immediate setup and operational capabilities, complete with necessary infrastructure.

National Industrial Corridor Development Programme

As part of the National Industrial Corridor Development Programme, the government will sanction 12 new industrial parks. These parks are expected to become hubs of economic activity, driving growth in manufacturing and services while creating jobs.

Critical Mineral Mission

Recognizing the importance of critical minerals for industrial processes, the government will establish a Critical Mineral Mission. This mission will focus on recycling critical minerals, promoting domestic production, and acquiring critical mineral assets overseas to ensure a steady supply of these essential materials.

Offshore Mining Auction

To further the growth of the mining sector, the government will launch the first tranche auction of offshore blocks for mining, building on prior exploration. This initiative is expected to unlock new resources and contribute to the sector's expansion.

Integrated Technology Platform for IBC

The government will establish an Integrated Technology Platform to enhance the outcomes under the Insolvency and Bankruptcy Code (IBC). This platform will streamline insolvency processes and improve the efficiency of business exits.

Expansion of C-PACE Services

The Centre for Processing Accelerated Corporate Exit (C-PACE) services will be extended to include the voluntary closure of Limited Liability Partnerships (LLPs). This expansion will make it easier for businesses to exit the market when necessary, without unnecessary delays.

Additional National Company Law Tribunals

To expedite insolvency resolutions, the government will set up additional National Company Law Tribunals, with some tribunals dedicated exclusively to cases under the Companies Act. This measure aims to reduce the backlog of cases and speed up the resolution process.

Establishment of Additional Debt Recovery Tribunals

In a bid to accelerate the recovery process, the government will establish more Debt Recovery Tribunals. These tribunals will play a crucial role in ensuring timely recovery of debts, further strengthening the financial ecosystem.

Budget 2024 demonstrates the government's commitment by providing substantial support to MSMEs and promoting the manufacturing and services sectors. Through financial access, infrastructure development, and regulatory improvements, these initiatives are set to empower businesses, drive growth, and enhance India’s competitive edge on the global stage.