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MSMEs in 2024: Key policy announcements that shaped the sector
Industry News- Jan 02,25
Companies with turnover above Rs 2.5 billion and all central public sector enterprises (CPSEs) were required to join the TReDS platform by March 2025 to enhance payment cycles.
The year 2024 proved to be transformative for India's MSME sector, marked by significant reforms aimed at addressing long-standing challenges and fostering growth. Despite these initiatives, the sector continued to face hurdles such as inflation, rising input costs, and global economic uncertainties, which disrupted supply chains and strained financial stability for many enterprises.
Revised Section 43B of the Income Tax Act
To combat delayed payments, a new clause was introduced under Section 43B, allowing buyers to claim expenses only if payments to micro and small enterprises (MSEs) are made within 45 days (if an agreement exists) or 15 days (if no agreement exists).
New MSME minister
Jitan Ram Manjhi, former Bihar Chief Minister, took office as MSME Minister in June 2024, bringing renewed focus to the sector.
TEAM scheme for e-commerce
The government launched the Trade Enablement & Marketing (TEAM) scheme, allocating Rs 2.77 billion to help MSEs access the Open Network for Digital Commerce (ONDC). This initiative aims to onboard 500,000 MSEs, with half owned by women, by 2027.
Revised payment reporting
The Ministry of Corporate Affairs mandated companies delaying payments to MSEs beyond 45 days to provide detailed disclosures in a revised MSME Form 1.
Reduced GeM transaction charges
Transaction charges on the Government e-Marketplace (GeM) portal were reduced to zero for orders up to Rs 1 million and capped for higher-value transactions, benefiting micro and small sellers.
Enhanced credit guarantees for women
Under the CGTMSE scheme, women-owned enterprises now receive 90% credit guarantees, aiming to support 2.7 million women entrepreneurs.
Extension of interest equalisation scheme
The Interest Equalisation Scheme for MSME exporters was extended until December 2024, though capped at Rs 5 million per enterprise for the fiscal year.
Increased Khadi wages
Khadi artisans saw wage hikes, with spinners receiving Rs 12.50 per hank and weavers receiving a 7% increase.
Mudra loan limit raised
The Mudra loan limit was increased to Rs 2 million, with a new ‘Tarun Plus’ category for loans exceeding Rs 1 million.
Mandatory TReDS onboarding
Companies with turnover above Rs 2.5 billion and all central public sector enterprises (CPSEs) were required to join the TReDS platform by March 2025 to enhance payment cycles.
Stricter SME IPO guidelines
SEBI introduced tighter regulations for SME IPOs, including profit benchmarks, phased promoter lock-ins, and caps on fund usage.
As MSMEs enter 2025, these reforms and policy measures are expected to lay the groundwork for a more resilient and inclusive business environment.
(FE)
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