Budget 2024's boost for students and small business aspirations

Finance minister Nirmala Sitharaman on Tuesday announced in the budget a raft of measures benefiting students and small businessmen. She announced an interest subvention on education loans of up to Rs 10 lakh.

The Model Skill Loan Scheme will facilitate finance of up to Rs 7.5 lakh. “For helping our youth who have not been eligible for benefits under government schemes...I am happy to announce a financial support for loans up to Rs 10 lakh for higher education in domestic institutions,” the FM said. To boost credit flows to MSMEs, banks have been encouraged to give term loans to small businesses without collateral and top-up loans during stress.

“For MSMEs, the guarantee schemes, encouraging new credit assessment models and credit support during stress periods are key enablers,” said Zarin Daruwala, CEO, Standard Chartered Bank, India and South Asia The new credit guarantee

scheme will help MSMEs in the manufacturing sector avail term loans for purchasing equipment without collateral or third-party guarantee. A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee cover of up to Rs 100 crore.

The limit of Mudra loans would also be doubled to Rs 20 lakh for entrepreneurs who have successfully repaid previous loans. The FM said beneficiaries of education loans will be allotted vouchers to avail the interest subvention benefit. “E-vouchers will be given directly to 100,000 students every year for annual interest subvention of 3% of loan amount,” she said. Sitharaman also said the government’s Model Skill Loan Scheme will be upgraded to facilitate loans of up to Rs 7.5 lakh with a guarantee from a government-promoted fund. This measure is expected to help 25,000 students every year