Union Budget 2025: Focus on Innovation, MSMEs and Economic Growth

Finance Minister Nirmala Sitharaman presented the Union Budget 2025, introducing key reforms aimed at driving technological innovation and strengthening the MSME sector. The budget focuses on expanding STEM education, supporting AI advancements, and improving financial accessibility for small businesses to fuel economic growth.

Strengthening Innovation in Education

A significant highlight of the budget is the increased investment in Atal Tinkering Labs and expanded infrastructure for STEM learning, particularly in AI. Experts in the education sector have praised these efforts.

Mr. Praneet Mungali, Educationist and Trustee of Sanskriti Group of Schools, welcomed the move, stating, “It is a welcome move to see the focus on innovation via more Atal Tinkering Labs and additional infrastructure for STEM learning, especially for AI. We are at the dawn of the AI epoch, and the only way for our country to become a developed nation is to stay in lockstep with new technologies, whether it is AI or quantum computing. This budget has made some important contributions towards that goal by encouraging innovation and increasing the outlay for capacity building in these vital areas.”

Empowering MSMEs with Credit and Policy Reforms

Recognizing the crucial role of MSMEs in India’s economic framework, the budget introduces significant changes, including the enhancement of investment and turnover thresholds for MSME classification. This move will allow more enterprises to avail of government incentives and benefits. The credit guarantee cover for micro-enterprises has also been raised from ₹5 crore to ₹10 crore, which is expected to inject ₹1.5 lakh crore in credit over the next five years.

Mukul Goyal, Co-Founder of Stratefix Consulting, commented, “The Union Budget 2025 has rightly emphasized the pivotal role of MSMEs in India’s economic landscape. The government’s decision to enhance the investment and turnover thresholds for MSME classification is commendable, enabling more enterprises to avail MSME benefits. Additionally, the increase in credit guarantee cover is a significant step that will empower small businesses to invest in innovation and expansion.”

Mr. Mukesh Pandey, Director of Rupyaa Paisa, highlighted the broader impact of these initiatives, stating, “MSMEs are strengthened by the Union Budget 2025-26 through major tax and credit reforms, which also induce growth and employment creation. The increased MSME credit guarantee from ₹5 crore to ₹10 crore is expected to generate another ₹1.5 lakh crore in credit over five years. Investment and turnover limits for MSME classification have also doubled, thus enlarging the benefits. With MSMEs providing 45% of exports with 75 million workers, the introduction of customized credit cards and the extension of the Fund of Funds would enhance capital accessibility and solidify India’s stance as a global manufacturing powerhouse.”

A Vision for Economic Growth

With a clear emphasis on fostering innovation and strengthening businesses, the Union Budget 2025 lays the foundation for sustainable economic expansion. By addressing the challenges of MSMEs and investing in future-ready education, the government aims to position India as a leader in global manufacturing and technology.

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