Unlocking Growth: How MSMEs Can Leverage Government Schemes and Financial Planning in FY 2025
By Krima Shah
On July 12, 2025
45 Comments
By Victors Group – Corporate Finance | Strategic Advisory | Business Support
India’s Micro, Small, and Medium Enterprises (MSMEs) stand at
the heart of the nation’s economy, contributing nearly 30% to India’s GDP and
providing livelihoods to over 110 million people. FY 2025 presents a critical
opportunity for these enterprises to scale operations and boost competitiveness,
especially in light of the Finance Act, 2024, which has ushered in a series of
targeted reforms. These policy enhancements are designed to help MSMEs access
finance more affordably, reduce their tax burden, and embrace innovation and
sustainability. This article outlines how MSMEs can capitalize on these
developments and implement smart financial strategies for long-term growth.
Key Highlights of the Finance Act 2024
The Finance Act, No. 30 of 2024, enacted on July 23, 2024,
introduces critical reforms that directly benefit MSMEs. Among the most
impactful are tax incentives. Profit deduction has been increased from
20% to 30%, allowing eligible MSMEs to retain more earnings for reinvestment.
Moreover, manufacturing MSMEs now enjoy a 7-year tax holiday—an extension
from the previous 5 years—providing more runway to achieve profitability.
Credit support measures have also been enhanced. The Act
introduces subsidized interest rates on loans up to ₹50 lakhs, easing
capital access. Simultaneously, the Credit Guarantee Fund Scheme has expanded
its limit from ₹2 crore to ₹5 crore, reducing risk for lenders and encouraging
greater loan approvals. These changes are designed to alleviate financial
pressure on small businesses and foster growth in both rural and urban sectors.
In terms of innovation and digital readiness, the Act has increased
the R&D grant eligibility from 10% to 15% of qualifying expenses. Tax credits
are now available for adopting digital tools and infrastructure, encouraging
MSMEs to invest in modernization and efficiency.
On the compliance front, the government has taken steps to reduce
administrative burdens. MSMEs with turnover below ₹1 crore now benefit from
simplified reporting processes.
Furthermore, a single-window clearance system has been introduced
to streamline registration, licensing, and business approvals—reducing red
tape and accelerating market entry.
For export-focused businesses, the Duty Drawback Scheme has
been broadened to include a wider range of goods and services. Export
insurance coverage has also been strengthened, helping MSMEs mitigate
international trade risks and expand into global markets with confidence.
In an effort to promote green and responsible growth, the Finance
Act introduces favorable financing for eco-friendly technologies and
energy-efficient practices. Grants and incentives for sustainability
initiatives aim to help MSMEs reduce operational costs while aligning with
India’s broader climate goals.
Barriers to Effective Implementation
Despite these progressive reforms, many MSMEs may still
struggle to fully leverage them. Key challenges include limited awareness
of available schemes, bureaucratic delays, strict documentation requirements
by financial institutions, high upfront investment costs for technology, and
a lack of digital infrastructure to adapt to new compliance systems.
At Victors Group, we recognize these challenges and help bridge
the gap by offering end-to-end strategic and implementation support.
Our advisors help MSMEs identify relevant schemes, prepare documentation,
secure approvals, and remain compliant throughout their growth journey.
Smart Tax-Saving Strategies for MSMEs
Beyond government incentives, MSMEs can significantly
enhance profitability through proactive financial planning. One popular
approach is opting for the Presumptive Taxation Scheme under Section 44AD,
which allows businesses to pay taxes based on a fixed percentage of
their turnover, without the burden of maintaining detailed accounting
books—ideal for small traders and service providers.
Businesses can also reduce tax liability by claiming deductions
for legitimate expenses such as rent, salaries, utilities, and insurance.
Additionally, investments in plant, machinery, or digital infrastructure
qualify for depreciation benefits under the Income Tax Act, offering further relief.
Startups registered under Startup India can enjoy a three-year
tax holiday and capital gains exemptions, making early-stage ventures more
financially viable. MSMEs may also opt for the GST Composition Scheme,
which offers lower flat tax rates and simplified filing processes—improving
liquidity and reducing compliance stress.
Export-oriented enterprises can benefit from the Merchandise
Exports from India Scheme (MEIS) and Services Exports from India Scheme
(SEIS), both designed to boost international market profitability. Lastly,
registering under Udyam not only formalizes the enterprise but also opens
the door to priority sector lending, interest subsidies, and government
procurement opportunities. You can register at udyamregistration.gov.in
How Victors Group Supports MSMEs
Victors Group plays a strategic role in helping MSMEs
convert policy opportunities into business success. We offer customized
financial planning, scheme facilitation, compliance support, R&D funding advisory,
and export-readiness services. From tax-saving strategies to certification
assistance, our holistic approach ensures that MSMEs can focus on their
core business while we handle the rest.
We simplify the most complex aspects of government programs, assist
with paperwork, and build future-ready financial models that support both
day-to-day operations and long-term expansion.
Conclusion: Scale Up with Confidence
The Finance Act 2024 provides a rare window for transformation.
MSMEs that take early action—by aligning operations with policy incentives
and adopting sound financial strategies—stand to gain a significant competitive edge.
But knowing what to do isn’t enough. Execution matters.
Let Victors Group be your growth catalyst in FY 2025. Whether
you aim to cut taxes, secure funding, expand into new markets, or build a
sustainable business, we’re here to guide you every step of the way.
