FM Nirmala Sitharaman announces major boost for SMEs and job creation in manufacturing sector, ET Auto

EU budget for 2024-2025: Finance Minister Nirmala Sitharaman in the Union Budget 2024-25 has given emphasis on MSMEs and manufacturing, especially labour-intensive manufacturing, for job creation and skill development under the new scheme. The new scheme aims to promote and encourage job creation in this sector by increasing employment opportunities for first-time job entrants. The scheme aims to cover 30 lakh youths, providing additional employment across sectors.

This scheme will provide an incentive to employees and employers to contribute to EPFO ​​(Employees’ Provident Fund Organisation) during the first four years of employment.

The finance minister added that the government will reimburse employers up to INR 3,000 per month for two years towards EPFO ​​contributions for each additional employee. This initiative aims to encourage the hiring of 50 lakh additional people.

This budget introduces a credit guarantee scheme for SMEs in the manufacturing sector, which enables them to take out term loans without third-party collateral to purchase machinery and equipment.

The finance minister also said that the borrower will have to pay an upfront guarantee fee and an annual guarantee fee on the declining loan balance, with the guarantee cover being Rs 100 crore.