Champion MSMEs May Incentivise Dwarf MSMEs To Grow

India's Budget 2024: Boosting MSME Growth through Dedicated Fund

The Indian government's latest Budget proposal aims to empower micro and small firms to grow beyond their current limitations by introducing a dedicated SME Growth Fund. This move is expected to encourage enterprises to increase their turnover and expand their operations.

Key Features of the SME Growth Fund:

• A dedicated Rs 10,000 crore fund aimed at creating future champions in the MSME sector
• Equity support for select enterprises, incentivizing them to grow and expand their operations
• Criteria for the fund will be announced separately, according to industry experts

According to Divyesh Dalal, Managing Director at DBS Bank India, the creation of Champion MSMEs through dedicated equity support will address the challenge of helping firms move to the next stage of growth.

Additional Support for MSMEs:

• A Rs 2,000 crore top-up to the Self-Reliant India Fund, which has already invested around Rs 10,979 crore in 577 MSMEs as of March 2025
• Revival of 200 legacy clusters through infrastructure and technology upgradation to address obsolescence

However, the MSME sector is facing challenges, including the disruption caused by the QCO and tariff conundrum, which may impact the growth prospects of these firms.

Industry Reaction:

Anil Bharadwaj of FISME noted that the SRI Fund has made significant investments in the MSME sector, and the introduction of an additional fund will provide further support to these enterprises.