New Delhi: In a boost to the MSME sector, Finance Minister Nirmala Sitharaman on Tuesday said the loan limit under the MUDRA scheme will be doubled to Rs 20 lakh. SIDBI will open new branches to serve more MSMEs over 3 years.
MSMEs are the backbone of the Indian economy, contributing approximately 30 per cent of the country’s GDP, 45 per cent of manufacturing output, and providing employment to 11 crore of India’s population.
The Economic Survey had observed that improving credit flow to the MSME sector at low cost has been a policy priority of the government and RBI. India’s financial sector needs to support capital formation and promote trade, business, and investments in MSMEs, enabling them to scale, the Survey said. The Lok Sabha Standing Committee on Finance, in its April 2022 report on ‘Strengthening Credit Flows to the MSME', noted that the credit gap in the MSME sector is estimated to be around Rs 20-25 lakh crore.