Is Government planning to increase limit of Mudra Loan?

Is the Government of India planning to increase the limit of Mudra Loan? Right now, the maximum limit for Mudra Loan is Rs.20 Lacs. There are several rumours that the Government is planning to increase the limit to Rs.50 Lacs. Today, we will know whether any such proposal is under process or not.

Pradhan Mantri Mudra Yojana (PMMY) has been a flagship initiative of the Government of India in providing easy credit to set up business in India. The scheme provides micro credit/Loan up to Rs. 20 lakhs to individuals to set up their business. The scheme has been classified under four categories as ‘SHISHU’, ‘KISHORE’ , ‘TARUN’ and ‘TARUN PLUS’.

• Shishu: Covering loans upto Rs.50,000/-
• Kishore: Covering loans above Rs.50,000/- and upto Rs. 5 lakhs
• Tarun: Covering loans above Rs. 5 lakhs and upto Rs. 10 lakhs
• Tarun Plus : Loans up to Rs. 20 lakh for enterpreneurs who have successfully repaid previous loans under the ‘Tarun’ category.

As per the Government of India, there is no proposal under process to increase the limit of Mudra Loan. So at present the limit of Mudra loan will remain at Rs.20 lacs only.

Steps take by Government for helping MSMEs wrt GST

The Government also said that the threshold limit of annual turnover for registration under GST for entities engaged in supply of goods has been increased from Rs. 20 lakhs to Rs. 40 lakh (other than some special category States) effective from April 1, 2019.

The threshold limit of annual turnover for supply of goods under composition scheme has been increased from Rs.75 lakhs to Rs. 1.5 crore (other than some special category States) effective from
1st April 2019.

A scheme of quarterly return filing and monthly payment (QRMP) has been introduced where small taxpayers with turnover up to Rs. 5 crores have an option to file returns on quarterly basis, instead of monthly return.

In addition, Government has announced financial relief and credit support packages for the MSME sector through the Union Budget 2025-26, which includes:

• Credit guarantee cover doubled from ₹5 crore to ₹10 crore (For Startups, from ₹10 crore to ₹20 crore);
• Investment and turnover limits have been significantly increased;
• New Fund of Funds;
• Scheme for First-time Entrepreneurs;
• Focus product scheme for footwear & leather sectors, toy sector and food processing.

GST registration process has been made completely online on the common portal. Deemed approval of application for registration where the proper officer fails to take action within the prescribed timelines. Moreover UPI & IMPS has been provided as an additional mode for payment of GST to facilitate taxpayers and to further encourage digital payment.