Budget 2025: New MSME Definition and Increased Credit Guarantee

Finance Minister Nirmala Sitharaman, in Budget 2025, redefined MSMEs by increasing investment and turnover limits by 2.5x and 2x, respectively. 

The new limits classify micro, small, and medium enterprises at ₹2.5 crore, ₹25 crore, and ₹125 crore in investment, with turnover caps at ₹10 crore, ₹100 crore, and ₹500 crore. 

The budget also enhances the credit guarantee cover for MSMEs from Rs 5 crore to Rs 10 crore, introduces ₹2 crore term loans for first-time women and SC/ST entrepreneurs, and announces customised credit cards for micro-enterprises.