One of the biggest takeaways from the Union Budget 2025 announced by Minister of Finance, Nirmala Sitharaman is the enhanced access to capital for startups and MSMEs. The expansion of the Credit Guarantee Scheme will make it easier for MSMEs and startups to secure funding without collateral, addressing one of the biggest pain points for emerging businesses. The Mudra loan limit has been significantly increased, ensuring that early-stage entrepreneurs can scale their ventures without financial roadblocks. Additionally, the rationalization of tax structures, lower corporate tax rates, and simplified GST compliance will ease cash flow constraints, allowing startups and MSMEs to reinvest in growth.
One of the most notable highlights of the budget is the introduction of a INR10,000 crore Fund of Funds, designed to address the funding challenges faced by startups. This initiative aims to provide much-needed financial support, enabling early-stage ventures to scale, innovate, and contribute to job creation. Additionally, the budget introduces a dedicated scheme for 5 lakh first-time entrepreneurs from women, SC, and ST communities, ensuring a more inclusive entrepreneurial ecosystem.
Beyond financial reforms, the budget has taken a futuristic approach by integrating infrastructure development with digital transformation. The allocation for plug-and-play industrial parks and logistics hubs will provide businesses with ready-to-use infrastructure, significantly reducing setup costs and accelerating time-to-market. The introduction of e-commerce export hubs will open new global opportunities for startups and small businesses, particularly in manufacturing, agritech, and handicrafts.
Perhaps the most game-changing aspect of this budget is its emphasis on regulatory simplification and skill development. By easing compliance norms, streamlining FDI regulations, and encouraging private sector collaboration in skilling initiatives, the government has created an ecosystem where startups can focus on scaling rather than navigating bureaucratic hurdles.
The Tech Panda asked what industry players thought of the Union Budget 2025 allocation when it came to startups.
Ankit Kumar, CEO, Skye Air
“The Union Budget 2025 strengthens India’s startup and MSME ecosystem with a ?10,000 crore fund, ensuring better access to capital and innovation support. Transforming India Post into a vast logistics network with 1.5 lakh rural post offices will enhance supply chain efficiency, benefiting small businesses nationwide. Simplified tax structures and compliance reforms will further ease operations, fostering growth and scalability. By integrating digital infrastructure with financial incentives, the budget paves the way for startups and MSMEs to expand, innovate, and compete globally, reinforcing India’s position as a hub for entrepreneurship and self-reliance under Atmanirbhar Bharat.
Pradeep Agrawal, President, WTC Business & Industry Association (WTCBIA)
“We, at WTC Business and Industry Association (WTCBIA), welcome the government’s initiatives to boost economic growth, entrepreneurship, and innovation. The budget announcements, particularly those related to MSMEs, startups, and exports, are a step in the right direction. The introduction of the Mutual Credit Guarantee Scheme for MSMEs and the expansion of SIDBI branches will improve access to credit. The government’s focus on promoting entrepreneurship, innovation, and skill development will also foster a culture of innovation among our youth. We believe that these initiatives will have a positive impact on the industry and the economy at large.”
Saurabh Rai, CEO, Arahas Technologies
“The announcement of the National Geospatial Mission is a game-changer for India’s startup and MSME ecosystem. By enhancing geospatial data capabilities, this initiative will empower businesses with better insights for logistics, infrastructure, and resource management. Leveraging AI and advanced computing, startups can drive innovation in sectors like agritech, smart mobility, and climate tech. The mission’s open data-sharing framework will reduce dependency on foreign sources, fostering self-reliance and accelerating growth. With greater access to accurate geospatial data, MSMEs and startups can optimize operations, expand efficiently, and contribute to India’s vision of Viksit Bharat as a global technology leader.”
Ashish Gupta, CEO, Fretbox
“The government’s initiatives to boost India’s startup ecosystem and MSME sector are a welcome move. The extension of the period of incorporation for startups by five years will provide a significant boost to innovation and entrepreneurship. Additionally, the allocation of ?20,000 crore to support private sector-driven research and the expansion of infrastructure at IITs will create a conducive environment for innovation and growth. The introduction of the Credit Guarantee Startup Scheme (CGSS) and the Customised Credit Card for Micro Enterprises (ME-Card) will improve access to credit for startups and MSMEs, driving growth and development. Furthermore, the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) will facilitate collateral-free loans, giving a major boost to the manufacturing sector. These initiatives will empower the next generation of entrepreneurs, researchers, and innovators, and we look forward to seeing the tangible results of these efforts.”
Dr Mahesh Gupta, CMD, Kent RO
“The government’s initiatives to boost MSME growth, a significant step towards furthering the Make in India vision. The Mutual Credit Guarantee Scheme for MSMEs, with guarantee coverage of up to ?100 crore, will facilitate collateral-free loans and boost the manufacturing sector . Enhanced credit assessment models utilizing digital footprint scoring will improve access to credit. Expansion of SIDBI branches and increased Mudra loan limits will provide direct credit to more MSMEs. These initiatives demonstrate the government’s commitment to supporting MSMEs, which account for 45% of India’s exports.”
Adeeb Jamal, Founder of A’raf PR
“The Union Budget 2025-26 is a significant boost for India’s startup ecosystem, with the INR10,000 crore Fund of Funds and a dedicated scheme for 5 lakh women, SC, and ST first-time entrepreneurs. These initiatives will unlock new opportunities, providing much-needed financial support and mentorship to aspiring business owners. As a PR firm and a startup, we understand the challenges of building a business from the ground up. This move not only fosters innovation but also ensures inclusivity, allowing diverse entrepreneurs to thrive in India’s growing economy. With increased accessibility to capital, startups can scale faster, contribute to job creation, and enhance India’s position as a global leader in entrepreneurship. A’raf PR is excited about the future this budget envisions and looks forward to supporting brands that drive meaningful change in the business landscape.”
Sakshi Shah, Founder, GoodLives
“The Union Budget 2025-2026 demonstrates a strong commitment to nurturing India’s startup ecosystem. The additional ?10,000 crore Fund of Funds is a crucial step in addressing the funding challenges that many startups face, helping them scale and sustain growth. What stands out even more is the dedicated support for first-time women and underrepresented entrepreneurs. Building a business requires not just capital but also confidence, and this initiative will encourage more diverse voices to enter the entrepreneurial space.”
Aman Chourasia, Founder, Own it Pure
“The Union Budget 2025-26 brings a strong push for entrepreneurship with the INR10,000 crore Fund of Funds, doubling the government’s commitment to supporting startups. Access to capital remains one of the biggest challenges for early-stage ventures, and this move will provide a much-needed financial cushion to help startups scale, innovate, and contribute to economic growth. The introduction of a dedicated scheme for 5 lakh first-time women, SC, and ST entrepreneurs is a game-changer, fostering inclusivity and ensuring that diverse talents and ideas get the platform they deserve. This budget reinforces the government’s vision of making India a global leader in innovation, self-reliance, and entrepreneurship.”
Anand Kumar Bajaj, Founder, CEO & MD, PayNearby
“The Union Budget 2025 takes bold steps to foster rural growth, women empowerment, and MSME ecosystem, unlocking significant opportunities for economic growth in Bharat. Easing credit for women, Scheduled Caste and Tribes, and first-time entrepreneurs with loans up to INR2 Crore, alongside the revamped support for MSMEs, will not only empower local businesses but also ensure a more robust economic framework. The increase in credit guarantee covers, along with the introduction of customized credit cards for micro-enterprises, will provide much-needed relief to entrepreneurs and help sustain business growth in local economies. The announcement to develop Grameen Credit Score framework to serve the credit needs of SHG members and people in rural areas is a welcome step to boost rural economy, especially women economic development through SHG framework. Additionally, the revamped KYC process will streamline business operations, making it more efficient across sectors, while the enhanced PM Svanidhi scheme will support street vendors by encouraging digital payments and reducing reliance on informal credit.”
Shantanu Bairagi, CEO, Veefin Capital
“The role of MSMEs in the journey towards Viksit Bharat has been called out clearly by the Finance Minister and commensurate to that are some of the fiscal and policy measures announced in the budget to boost the backbone of the economy. Availability of credit access, simplification of CKYC and enhancement of credit guarantee covers for MSMEs, startups and exporters stand out as key fiscal support measures from the Government of India. A big increase in Udyam registrations, which is an indicator of extent of formalization of small and medium businesses, is expected with customized credit cards with INR 5L limit being introduced for registered businesses. With the government expecting to give 10 Lakh credit cards in a year, this is going to be yet another measure to incentivize MSME businesses to formalize and have faster access to working capital. The enhancement in the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively will spur widespread adoption of digitization among small businesses and bring them on par in terms of access to commerce and capital.
“The Manufacturing Mission to furthering Make in India and Make for the World by improving ease of doing business, create a vibrant MSME ecosystem and improve availability of technology will enhance the credit worthiness of small and medium sized and boost the confidence of financial institutions in doubling up their efforts to lend to MSME. The Economic Survey has already indicated how banks credit to MSMEs has grown 13% y-o-y. Some of the measures announced in the budget will further boost credit for the MSME ecosystem.
Sundeep Mohindru, Founder & Promoter, M1xchange
“The Union Budget 2025 has given much-needed attention to MSMEs, recognizing them as the key driver of India’s economy and global competitiveness. The enhancements in definition of MSME, upto INR125 crore of investment in plant and machinery and an annual turnover of INR 500 crores, will provide much-needed support to MSMEs in scaling operations, embracing new technologies, and accessing capital more efficiently. With new definition the benefit of TReDS will expand to larger set of enterprises for facility of early realisation of their dues from customers, who were earlier deprived of this benefit.
“Expanding the credit guarantee cover and introducing customized credit cards for micro-enterprises will inject much-needed capital liquidity into the MSME sector, allowing businesses to invest in growth and innovation. Further, set up of Bharat Trade Net portal will digitalise the documentation flow of cross border business and enhance possibility of cross border finance for MSME exporters in big way on ITFS (International Trade Finance System) platform.
“The next level initiative by government to decriminalise 100 more provisions under various Acts will give confidence to businesses to invest more and experience the ease of doing business. Additionally, the Manufacturing Mission’s emphasis on workforce development, and technology adoption will further strengthen India’s position as a global manufacturing powerhouse. Especially, with global companies increasingly looking to India as a preferred business destination, these measures will not only improve MSME productivity and competitiveness but also accelerate the ‘Make in India’ vision, helping position India as a dominant player in the global supply chain.”
Kiran Dev, CEO, BizongoFin
“The government’s emphasis on strengthening MSMEs in this year’s budget is evident. Increasing the credit guarantee cover from ?5 crore to ?10 crore is a crucial step that will unlock ?1.5 lakh crore in additional credit over the next five years. Additionally, a term loan of up to ?20 crore will be provided to well-run export-oriented MSMEs, further supporting their expansion. With MSMEs employing 7.5 crore individuals and contributing 36% to manufacturing, these measures will bolster their growth, enhance financial access, and reinforce India’s position as a global manufacturing hub.”
Pushkar Mukewar, Co-founder & CEO, Drip Capital
“The Union Budget 2025 strongly emphasises exports as a key pillar of economic growth, bringing much-needed support to MSME exporters who contribute nearly 45% of India’s total exports. The enhancement of investment and turnover limits for MSME classification and the significant expansion of credit guarantee cover for well-performing exporter MSMEs will enable businesses to scale efficiently and access capital more easily.
“Establishing the Export Promotion Mission and BharatTradeNet (BTN) as a unified digital public infrastructure for trade documentation and financing solutions is a welcome step. By streamlining access to export credit and cross-border factoring, these initiatives will improve liquidity and reduce operational bottlenecks for exporters. Additionally, aligning BTN with international trade practices will enhance India’s ease of doing business and strengthen our position in global markets.
“Reducing customs duties on key seafood industry inputs will further boost the competitiveness of Indian seafood exports, helping businesses expand their global footprint. With these policy measures, the government has reaffirmed its commitment to making India a leading player in global trade while empowering MSMEs with the right financial and digital infrastructure to compete internationally.”
Munindra Verma, CEO, M1 NXT
“The Union Budget 2025 takes a progressive approach by recognizing exports as a key pillar of economic growth. The establishment of the Export Promotion Mission and Bharat Trade Net as a unified digital public infrastructure will significantly enhance trade facilitation, and help MSMEs build a strong digital trail, enhancing the trust of financial institutions in their businesses. With digital documentation, transparency in trade transactions will improve, leading to greater credit infusion and improving access to export credit and cross-border factoring support for a better financial inclusion for MSMEs.
“We believe that the emphasis on easing financial bottlenecks for exporters, particularly MSMEs, will be beneficial in long term. Further addressing non-tariff barriers will strengthen India’s global trade competitiveness. With simplified access to trade finance and seamless digital documentation will be instrumental in driving efficiency, liquidity, and ease of doing business in international markets. These measures mark a crucial step toward positioning India as a stronger player in global trade.”
Gurjodhpal Singh, CEO, Tide India
“The Union Budget 2024-25 has made notable progress in addressing the needs of MSMEs, aligning with several key expectations. The enhancement of investment and turnover limits for MSME classification by 2.5 and 2 times, respectively, is a forward-looking step that will encourage scalability and job creation, particularly for the youth. This move is likely to instill confidence in MSMEs to expand their operations and contribute more significantly to employment generation.
“The substantial increase in credit guarantee cover—up to INR10 crore for Micro and Small Enterprises and INR 20 crore for Startups—addresses the persistent challenge of access to capital. The introduction of customized Credit Cards for micro-enterprises is another positive step, simplifying funding and fostering operational efficiency. Additionally, the budget’s emphasis on inclusivity, through schemes offering term loans up to INR 2 crore for women, SCs, and STs first-time entrepreneurs, alongside online capacity-building programs, is commendable. The recognition of gig workers through identity cards and healthcare benefits under PM Jan Arogya Yojana further supports the new-age services economy.
“However, the budget falls short in certain areas. A more focused approach to leveraging AI in business and fintech partnerships could have significantly improved access to credit for MSMEs. While initiatives like transforming India Post into a public logistics organization and leveraging rural post offices for economic growth indirectly promote digitization, a direct push for AI-driven solutions would have been more impactful. Additionally, explicit tax reforms to ease compliance burdens on MSMEs remain unaddressed, which could have further strengthened the sector.
“Overall, the budget lays a solid foundation for MSME growth, with a focus on credit availability, scalability, and inclusivity. While it misses opportunities to address AI integration and tax reforms, the measures announced are poised to empower MSMEs to drive economic recovery, job creation, and India’s vision of becoming a global manufacturing hub. The success of these initiatives will depend on effective implementation and continued focus on addressing gaps in the future.”
Pallavi Shrivastava, Co-founder, Progcap
“Progcap welcomes the Union Budget 2025, which strengthens the foundation for MSME growth by addressing long-standing challenges in access to credit, scalability, and global competitiveness. A major highlight of this budget is the enhanced Priority Sector Lending (PSL) classification, with investment limits increased by 2.5 times and turnover limits doubled. This change expands the pool of MSMEs eligible for PSL-linked credit, incentivizing financial institutions to direct more funding into the sector. With more MSMEs qualifying for PSL benefits, businesses will have better access to affordable capital, reducing their reliance on high-cost borrowing and fostering long-term growth.
“For years, one of the biggest hurdles for MSMEs has been securing timely and adequate credit. The expansion of the credit guarantee cover for micro enterprises from INR5 crore to INR 10 crore is a critical move, unlocking INR 1.5 lakh crore in additional lending over the next five years. This gives financial institutions greater confidence to extend credit to underserved businesses, enabling them to access working capital without collateral.
“The introduction of customised credit cards with a INR 5 lakh limit for micro enterprises registered on the Udyam Portal is another step toward financial flexibility. Many small businesses operate with irregular cash flows, and these cards will give them a structured, accessible way to manage short-term expenses. This allows credit distribution at the last mile to an even wider segment of the market.
“The budget also introduces a new scheme offering term loans of up to INR 2 crore for first-time women, Scheduled Castes (SC), and Scheduled Tribes (ST) entrepreneurs. Historically, these groups have encountered barriers such as limited access to capital and inadequate managerial support, hindering entrepreneurial pursuits. This initiative not only provides financial assistance but also includes online capacity building for entrepreneurship and managerial skills, empowering marginalized groups to establish and grow their businesses.
“With MSMEs contributing 45% to India’s exports, the newly announced export promotion mission will help businesses navigate non-tariff barriers and expand globally. As MSMEs scale up to meet global demand, they will need stronger financial, technical, and skilling support.”
Sandhya Vasudevan, Member of the Board, ASIA Research
“The budget boosts MSMEs with an 89% increase in PLI allocation to INR 16,092 crore, supporting 16 sectors, including electronics and automobiles. A sevenfold increase in automobile funding and 36% rise in electronics investment highlight the government’s push for self-reliance. However, a lack of a Standard Essential Patents (SEP) policy hinders innovation. To address this, a INR 20,000 crore DeepTech Fund supports AI, robotics, and biotechnology startups, alongside 10,000 research fellowships. Despite this, India’s R&D expenditure remains low at 0.65% of GDP, underscoring the need for further investment. The Investment Friendliness Index and Financial Stability and Development Council reforms aim to improve regulatory efficiency, fostering a better business environment.
“The MSME sector, contributing 36% to manufacturing and 45% to exports, benefits from increased investment and turnover limits. However, patent system inefficiencies and delayed payments remain challenges. Strengthening IP laws and ensuring timely payments through the MSME SAMADHAAN portal will be crucial for sustaining growth.”
Smitha Shetty, Regional Director APAC, Achilles Information Ltd
“Achilles welcomes the Indian government’s FY25 budget, which reinforces India’s position as a global manufacturing and export hub. Increased MSME credit limits and expanded classification will drive industrial growth, job creation, and innovation. Investments in clean technology manufacturing—solar, EV batteries, and wind turbines—mirror global sustainability trends, strengthening supply chains. Maritime and shipping sector incentives will enhance trade competitiveness. However, robust supply chain due diligence and ESG compliance are vital to mitigate risks. While this budget lays a strong foundation, its execution will determine India’s success in becoming a self-reliant, globally competitive manufacturing powerhouse”.
Dr. Harshit Jain, Founder & Global CEO, Doceree
“The Union Budget 2025-26 lays a solid groundwork for India to assert its leadership in global healthcare and innovation. With a INR 90,958 crore healthcare allocation, coupled with investments in daycare cancer centres and the addition of 10,000 new medical seats, India is poised to enhance both – care accessibility and quality. Further, the push for broadband connectivity in rural health centres and the introduction of healthcare identity cards for gig workers under PM Jan Arogya Yojana further underscores India’s commitment to advancing healthcare equity.
“On the entrepreneurial front, the increased Mudra Loan limits and targeted support for MSMEs will empower pharma and healthtech innovators, driving a resilient healthcare ecosystem. The establishment of the Centre of Excellence for AI and the expansion of STEM education through the Atal Tinkering Lab initiative will catalyse technological disruption within healthcare. Additionally, prioritizing funding for marginalized first-time women entrepreneurs will increase their participation in both healthcare and economic growth. Simultaneously, the ‘Heal in India’ initiative will elevate medical tourism, creating job opportunities and attracting foreign investments, while exemptions on cancer drug imports and continued support for production-linked incentives will solidify India’s role as a global pharmaceutical leader. With the budget’s emphasis on research, digital transformation, and structured financial support, Doceree stands aligned with the vision of ‘Vikasit Bharat’, and welcomes Government’s ongoing efforts by utilizing technology-driven innovations to enhance healthcare effectiveness.”
George Alexander Muthoot, MD, Muthoot Finance
“The government’s focus on MSMEs, women entrepreneurs, and first-time business owners through term loans of up to INR2 crore and structured capacity-building initiatives will drive small business growth, fostering employment and strengthening the country’s production ecosystem. Additionally, the INR 10,000 crore Fund for Startups will fuel entrepreneurship. These measures will contribute to a more self-reliant and resilient economy. As India’s largest gold loan NBFC, Muthoot Finance remains committed to supporting this vision by facilitating seamless access to credit and financial inclusion for individuals and businesses across India.”
Bruce Keith, Co founder & CEO, InvestorAi
“While the Budget started with a big bang quite literally, the Honourable Finance Minister has announced a string of boosters for the Indian startup sector. The extensions to the loan programs make sense in the context of micro enterprises. However, the crucial fund of funds of Rs 10,000 crore will play a key role in boosting domestic capital in the startup sector. The announcement on deep tech fund, while details are awaited, it should be viewed through the DeepSeek lens of what can be done with relatively small amounts of capital when provided to agile and creative teams. We expect the VC ecosystem to bring velocity and momentum into funding these enterprises.
“I was especially delighted to hear about the enhancing the spirit of curiosity and innovation with IIT expansions of capacity and centres of excellence for AI education – talent availability is a necessary part of continuing our growth”.
Ankur Mittal, CO-Founder, Inflection Point Ventures
“Our ask was a better credit platform and framework for startups and to that extent this is a welcome step. This will allow them to grow and build sustainable businesses and not be dependent on just equity infusion to grow. Their capacity to attract follow-on growth capital will be further strengthened by the additional cash, which will also help them make important investments in operations, personnel, and technology. This action boosts job creation, accelerates startup growth, and creates long-term value in the ecosystem by resolving financial limitations”.
Aditya Pandranki, Founder & CEO, DOQFY
“We applaud the government’s fresh contribution of an additional INR 10,000 crore, in addition to the existing government contribution of INR 10,000 crore for startups. To boost MSMEs growth and efficiency, the government will enhance the investment and their turnover limits, increasing them by 2.5 times and 2 times, respectively. This move is expected to empower MSMEs to scale up, innovate, and generate more employment opportunities for the youth.
“Deep Tech Fund of Funds is a big win for startups, catalyzing next-gen innovation. The government’s allocation of INR 20,000 crore to implement private sector-driven research, development, and innovation is truly commendable. It is a significant step towards fostering innovation and growth.”
Saahil Goel, MD & CEO, Shiprocket
“The government’s MSME-focused budget measures further reinforce this vision. Enhancing credit guarantees, raising MSME classification thresholds, and extending tax exemptions provide crucial financial support to small enterprises. The introduction of customized credit cards with a INR5 lakh limit for micro-enterprises and an expanded fund of funds program with INR 91,000 crores committed to AIFs signal strong intent toward fostering entrepreneurship and job creation.
“These strategic interventions will not only strengthen Bharat’s economic backbone but also drive inclusive growth, ensuring that self-help groups, women entrepreneurs, and emerging start-ups can thrive. By integrating logistics expansion with robust financial support for MSMEs, the government is laying the foundation for a more self-reliant and prosperous Bharat.”
Pramod Gummaraj, Founder & CEO, Aprecomm
“The government’s renewed commitment to fostering innovation through the additional INR10,000 crore Fund of Funds for Startups is a significant boost for the entrepreneurial ecosystem. Such measures not only ease capital constraints but also foster an ecosystem where disruptive deep tech can thrive. The Bharat Net Scheme’s focus on providing broadband connectivity to all government secondary schools is commendable, as it lays the foundation for a digitally inclusive society. Enhanced connectivity will bridge the digital divide and open avenues for tech-driven education. Furthermore, by increasing investment and turnover limits for MSMEs, the government empowers these enterprises to scale and innovate, reinforcing their role as pivotal contributors to the economy.”
Debadatta Chand, Managing Director & CEO, Bank of Baroda
“The Budget has reiterated its commitment to fiscal prudence by moving along the FRBM path. From the point of banks, the focus on growth is positive, as this would mean steady growth in credit as the budget has provided the necessary push to MSMEs and industry. There is boost to the corporate bond market including municipal bonds which will have a big role to play in financing investment required in the coming years. The concessions on the income tax front will put more money in the hands of taxpayers and would boost consumption in the economy. The capital expenditure of Rs 11.2 lakh crore announced will encourage investment and also help backward linkages to sectors like steel, cement, machinery etc. Working on the PPP mode across ministries to implement various projects is very progressive and will boost infrastructure capacity in the country.”
Manjunath Jyothinagara, Managing Director, KASFAB Tools, Pvt. Ltd.
“The budget announcement is certainly a boost to MSME by raising turnover and investment limits to access credit and increasing credit guarantee scheme support. Even though policy decisions are welcome, no specific financial incentives like enhancement of capital subsidy like in PLI for larger projects are provided to MSME’s. It is also unfortunate to see no specific measures to promote local ecosystem for semiconductor industry growth. Government sponsored exchange programs for MSME’s with other semiconductor ecosystems in the world through bilateral cooperation agreements is an important route to enhance the local ecosystem capability. However, there is no effort to address this requirement. The government directives on financial support through PLI scheme to large players to trickle down to MSME’s is missing which takes away opportunity for local ecosystem growth”.
