Union Finance Minister, Arun Jaitely tries to touch the issues of small and medium enterprises (SMEs), as in his median Budget 2015-16 he has proposed to create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore to enhance credit for SMEs.

"MUDRA Bank to be set up for small and medium enterprises (SMEs) in lending priority was given to SC/ST enterprises," Jaitely said Saturday.

MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana. In lending, priority will be given to SC/ST enterprises.

Jaitely while presenting the Union Budget 2015-16, said, "Our government firmly believes that development has to generate inclusive growth. While large corporate and business entities have role to play, this has to be complemented by informal sector enterprises which generate maximum employment the Minister added."

"There are some 5.77 crore small business units, mostly individual proprietorship, which run small manufacturing, trading or service businesses, 62 percent of these are owned by SC/ ST/ OBC."

He further said that these bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit.

Jaitley therefore, proposed to create a Micro Units Development Refinance Agency (MUDRA) Bank.

These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs; existing small businesses, too, will be able to expand their activities.

The Finance Minister further said that "Just as we are banking the un-banked, we are also funding the un-funded".

Rs 1,000 cr also allocated for National skills Mission for more job creations which will also lead young generations to be first generations entrepreneurs.

Government is also planning for electronic trade receivable discounting system (TReDS) for MSMEs. "We are in the process of electronic trade receivable discounting system (TReDS) financing of trade receivables of MSMEs from corporate and other buyers through the multiple finances. This should increase liquidity in the MSME sector," he added.

Apex industry body, CII finds that this budget well definitely drive development of MSME sector and create jobs.

"The FM has recognized that SMEs are the backbone of Indian industrial output and employment and rightly underscored the importance the promoting entrepreneurship and startup enterprises," Co chairman of CII national MSME council, T.T Ashok told SME Times.

"The decision to revisit definition of MSME by providing for a higher capital ceiling was most awaited which has been our recommendation for the last five years," he said.

"The proposal of the Finance Minister to set up a trade facilitation center and a craft center and a museum with an outlay of Rs 50 crore to develop and promote handloom products is a welcome step for the development of the micro enterprises in India and is going to help them showcase at a global scale," Ashok said.

Setting up a entrepreneur friendly legal bankruptcy framework,  setting up a committee to check financial architecture sector and the amendment of the Apprenticeship Act will encourage MSMEs to avail of the benefits under the scheme, are also welcomed by CII.

President, Federation of Indian Export Organisations (FIEO), M Rafeeque Ahmed said, "MUDRA Bank, with a corpus of Rs 20,000 Crores, and credit guarantee corpus of Rs 3,000 crores and Trade Receivables discounting System (TReDS) for facilitating financing of trade receivables of MSMEs will address the liquidity problem of small business."