Union Budget 2024: Empowering MSMEs, FinTech Innovation, and Women Entrepreneurs for Inclusive Growth

By Puja Sharma

On February 1st, Finance Minister Nirmala Sitharaman presented the Interim Budget 2024. This crucial financial announcement provides a snapshot of the government’s economic priorities and sets the stage for forthcoming fiscal plans, outlining key initiatives and allocations.

The 2024 Union Budget consistently underscores its commitment to the tech sector, emphasising inclusive growth across various fields, including finance, to foster economic empowerment across all industries.

“We applaud the government’s intention in calling out ‘timely and adequate finances, relevant technologies and appropriate training’ for MSMEs as an ‘important policy priority’. This will push financial institutions to keep priority sector lending in focus and adopt technologies that boost credit disbursement to MSMEs. We do foresee strong policy support in the coming months for more MSMEs to formalise, resulting in a further uptick in GST filings and Udyam registrations, that will help small businesses to have access to formal channels of credit.” – Raja Debnath, Managing Director, Veefin Solutions Ltd, a supply chain finance platform that powers financial institutions to provide working capital to MSMEs.

Debnath added, Furthermore, the government has declared its intention to establish a regulatory framework and augment the financial sector’s scale, capacity, and expertise, the subsequent impact of which will create a more robust, resilient, and thriving financial ecosystem in India. This will also draw global demand for financial innovation from India. The finance minister has mentioned that the India-Middle East-Europe Economic Corridor is a strategic and economic game changer for India. I believe financial services will be a critical element of this vision.”

On youth aspirations, entrepreneurship, and financial services, “The budget’s focus on ‘youth and entrepreneurs’ will help realise the government’s vision of a developed India by 2047, as they are the key drivers of growth. As one of India’s leading digital lending companies, Fibe’s vision of empowering and upskilling the youth to fulfil their aspirations is aligned well with the initiatives laid down in the Union Budget 2024. We welcome the announcement of creating a corpus of one lakh crore with a five-year interest-free loan and providing long-term financing and refinancing with low or nil interest rates.” said, Akshay Mehrotra, CoFounder & CEO, Fibe, a consumer lending apps for young, aspirational and technologically savvy Indians.

The move will not only harness the potential of this vibrant, tech-savvy generation but also foster innovation and contribute to technological advancements and economic progress. We applaud the success of the ‘Skill India Mission’ that has trained 1.4 crore youth while upskilling 54 lakh youth.

There is an overall boost to the manufacturing ecosystem, with the outlay for infrastructure being 3.4% of the GDP. This will have a ripple effect on the entire value chain of manufacturing, a large part of which is led by the MSMEs. Additionally, the Interim Budget 2024 prioritises timely finances, tech advancement, and skill development for MSMEs. With solid support from the government, we are optimistic there will be a massive drive within the MSMEs ecosystem to formalise and thereby have access to formal credit channels to scale their business.

“Further, with the positive acknowledgement within the industry regarding the benefits of GST and collections surging to ₹1.72 lakh crore in January 2024, we are certain that GST-based analytics to credit decisioning will see a massive adoption in India in the coming months. The finance minister has also acknowledged GIFT IFSC’s role in creating a robust gateway for financial services for the economy. This is a great boost to ongoing projects underway at GIFT IFSC. We expect some new financial innovations such as TReDS for exporters to come to go live in 2024-25,” – Sundeep Mohindru, Promoter & Managing Director, M1xchange, a TReDS platform in India that facilitates working capital solutions for MSMEs through analytics-based invoice discounting.

“We commend the government’s continuous support towards making women part of the formal economy across sectors from agriculture to entrepreneurship. Recognising this crucial contribution, today’s budget clearly shows the focus of the government of India towards empowering women for the country’s economic development. The Mudra Yojana scheme has been a game-changer in encouraging them to start their businesses, providing loans to 30 crore women. This will bridge the digital divide and help equip female entrepreneurs with the tools they need to compete in the modern marketplace.” –  Gurjodhpal Singh, CEO of Tide India, a business financial platform for MSMEs.

The empowerment of women through entrepreneurship, ease of living, and dignity for them has gained momentum in the past few years. Continuous government support for women will help them take centre stage in the country’s sustainable growth. To transform the rural socio-economic landscape with empowerment and self-reliance, the GOI will enhance the ‘Lakhpati Didi’ target from 2 crore to 3 crore.

Pal noted, “We believe Indian FinTechs will help women-led MSMEs to access formal credit lines while saving time and money through digitisation and to unlock their immense potential to drive India’s economic growth.”