Budget 2025: Highlights on Skill Development, Education, MSMEs & Start-ups

Union Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget on Saturday, February 1 2025. The Budget includes key announcements for the MSME sector, women, farmers, education, and export promotion.

India continues to be the fastest-growing major global economy. Over the past decade, the government’s structural reforms and development initiatives have attracted significant international attention. This year’s Budget focuses on inclusive growth, with targeted measures for Garib (Poor), Yuva (Youth), Annadata (Farmers), and Nari (Women).

Budget theme:

The great Telugu poet and playwright Gurajada Appa Rao had said, ‘Desamante Matti Kaadoi, Desamante Manushuloi’; meaning, ‘A country is not just its soil, a country is its people.’ In line with this, for us, Viksit Bharat, encompasses:

1. zero-poverty;
2. hundred per cent good quality school education;
3. access to high-quality, affordable, and comprehensive healthcare;
4. hundred per cent skilled labour with meaningful employment;
5. seventy per cent women in economic activities; and
6. farmers making our country the ‘food basket of the world’.

Here’s a detailed look at the key highlights focusing on the Education, Skill Development, and Entrepreneurship sectors:

Skill Development & Employment

New Initiatives:

• National Centres of Excellence for Skilling: Building on the initiative announced in the July 2024 Budget, five National Centres of Excellence for skilling will be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews.
• Building Rural Prosperity and Resilience: A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme will be launched in partnership with states. This will address under-employment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity.

Addition To Infrastructure:

• Shipbuilding: To include additional infrastructure facilities, skilling and technology to develop the entire ecosystem of Shipbuilding Clusters.

Employment:

• Employment-led growth in Tourism: Organizing intensive skill-development programmes for our youth including in Institutes of Hospitality Management

Skilling:

• Skilling in Food Processing: Establishment of a National Institute of Food Technology in Bihar, enhanced income for the farmers and skilling, entrepreneurship and employment opportunities for the youth.

05 National Centres of Excellence for skilling to be set up with global expertise and partnerships

Education

Schemes:

• Bharatiya Bhasha Pustak Scheme: This Scheme to provide digital-form Indian language books for school and higher education. This aims to help students understand their subjects better.

Expansion of Infrastructure:

• Expansion of Capacity in IITs: Total number of students in 23 IITs has increased 100 per cent from 65,000 to 1.35 lakh in the past 10 years. Additional infrastructure will be created in the 5 IITs started after 2014 to facilitate education for 6,500 more students. Hostel and other infrastructure capacity at IIT, Patna will also be expanded.
• Expansion of Medical Education: Our Government has added almost 1.1 lakh UG and PG medical education seats in ten years, an increase of 130 per cent. In the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years.

New:

• Centre of Excellence in AI for Education: Centre of Excellence in Artificial Intelligence for Education will be set up with a total outlay of INR 500 crore.
• Atal Tinkering Labs: Fifty thousand Atal Tinkering Labs will be set up in Government schools in next 5 years to cultivate the spirit of curiosity and innovation, and foster a scientific temper among young minds.

Access to Digital World

• Broadband Connectivity to Government Secondary Schools and PHCs: Broadband connectivity will be provided to all Government secondary schools and primary health centres in rural areas under the Bharatnet project.

Remittances for Education:

• TDS/TCS rationalization for easing difficulties: The threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from ` 7 lakh to ` 10 lakh. I also propose to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.
• Education Cess: For assessment year 2025-26, “Health and Education Cess” is to be levied at the rate of 4% on the amount of income-tax so computed, inclusive of surcharge wherever applicable, in all cases. No marginal relief shall be available in respect of such cess.

Read More from Education Sector, Click Here

INR 500 Crores allocated for Centre of Excellence for AI in Education

INR 128650 Crores budget estimates allocated for Education for 2025-26

MSMEs, Start-ups & Entrepreneurship

Startup Funds:

• Fund of Funds for Startups: The Alternate Investment Funds (AIFs) for startups have received commitments of more than INR 91,000 crore. These are supported by the Fund of Funds set up with a Government contribution of INR 10,000 crore. Now, a new Fund of Funds, with expanded scope and a fresh contribution of another INR 10,000 crore will be set up.

Criteria for Classification of MSMEs:

• Revision in classification criteria for MSME: Currently, over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports. To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth. Revised Criteria (Turnover in Crores): Micro Enterprises – 10 Crores; Small Enterprises –  100 Crores and  Medium Enterprises – 500 Crores

Schemes & Missions:

• Export Promotion Mission: With sectoral and ministerial targets to facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.
• Scheme for First-time Entrepreneurs: A new scheme will be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up to INR 2 crore during the next 5 years. The scheme will incorporate lessons from the successful Stand-Up India scheme. Online capacity building for entrepreneurship and managerial skills will also be organized.
• Focus Product Scheme for Footwear & Leather Sectors: To enhance the productivity, quality and competitivenessof India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products. The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of INR 4 lakh crore and exports of over INR 1.1 lakh crore.
• National Manufacturing Mission: This mission will be setup covering small, medium and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states. 5 focus areas: ease and cost of doing business; future ready workforce for in-demand jobs; a vibrant and dynamic MSME sector; availability of technology; and quality products.

Measures:

• For Labor-Intensive Sector: To promote employment and entrepreneurship opportunities in labor-intensive sectors, our Government will undertake specific policy and facilitation measures.
• For Toy Sector: To focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys to represent the ‘Made in India’ brand.

Credits:

• Credit availability with guarantee cover: To improve access to credit, the credit guarantee cover will be enhanced:
  • For Micro and Small Enterprises, from INR 5 crore to 10 crore, leading to additional credit of INR 1.5 lakh crore in the next 5 years;
  • For Startups, from INR10 crore to 20 crores, with the guarantee fee being moderated to 1 percent for loans in 27 focus sectors important for Atmanirbhar Bharat; and
  • For well-run exporter MSMEs, for term loans up to INR 20 crore.
• Credit Cards for Micro Enterprises: Introduction of customized Credit Cards with a INR 5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued.

Tax Benefits:

• Extension of timeline for tax benefits to start-ups: The existing provisions of Section 80-IAC of the Act, inter alia, provide for a deduction of an amount equal to hundred percent of the profits and gains derived from an eligible business by an eligible start-up for three consecutive assessment years out of ten years, beginning from the year of incorporation, at the option of the assessee subject to the condition that
  • the total turnover of its business does not exceed one hundred crore rupees,
  • it is holding a certificate of eligible business from the Inter-Ministerial Board of Certification,
    and
  • it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2025.

It is proposed to amend the above section so as to extend the benefit for another period of five years, i.e. the benefit will be available to eligible start-ups incorporated before 01.04.2030. This amendment will take effect from the 1st day of April 2025.

Read More from MSMEs and Startups, Click Here

Alternate Investment Funds (AIFs) for startups have received commitments of more than INR 91,000 crores

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