Authored by Mr. Karan Sehdev, Founder of Merch Matters

The Micro, Small, and Medium Enterprises (MSMEs) sector is widely regarded as the backbone of the Indian economy. Contributing approximately 30% to the nation’s GDP and employing over 110 million people, this sector plays a crucial role in driving innovation, creating jobs, and fostering regional development across manufacturing, services, and exports.
As the Union Budget 2025 approaches, the MSME sector eagerly awaits measures aimed at addressing its challenges and paving the way for long-term growth, sustainability, and global integration.
Improving Credit Access
Access to affordable credit remains one of the most significant challenges for MSMEs. The sector hopes for streamlined lending processes, expansion of credit guarantee schemes, and reduced loan interest rates. Special funding initiatives for women entrepreneurs and first-time borrowers are anticipated to boost inclusivity and drive innovation.
Encouraging Digital Transformation
With the global shift toward digitalization, MSMEs are seeking incentives to adopt advanced tools and technologies. Allocations in the budget for upskilling programs and grants to implement AI, IoT, and e-commerce solutions could significantly improve operational efficiency and competitiveness.
Infrastructure Development
Infrastructure is a critical factor in enabling MSME growth. Investments in industrial clusters, logistics hubs, and MSME-focused supply chain systems can enhance productivity and minimize operational inefficiencies. Higher budgetary allocations for these initiatives are essential to address logistical bottlenecks.
Promoting Green Initiatives
In line with global sustainability efforts, MSMEs are looking for support to adopt environmentally friendly practices. Initiatives promoting energy-efficient manufacturing, sustainable product innovation, and eco-friendly processes will help the sector transition to greener operations.
Strengthening Global Integration and Financial Protections
To boost global competitiveness, MSMEs require better access to export incentives and trade-related assistance. Delayed payments from larger corporations often cause financial strain, emphasizing the need for a stronger legal framework to ensure timely resolutions and payment security.
Despite challenges from the pandemic and global economic uncertainties, MSMEs have shown remarkable resilience. The upcoming budget offers an opportunity for the government to reaffirm its commitment to this vital sector.
With supportive policies and sufficient financial allocations, Budget 2025 can pave the way for a new era of growth, innovation, and sustainability for MSMEs, enabling them to play a more prominent role in achieving India’s economic goals.