How's Indian Government Handholding MSMEs?

Ministry of MSME is helping & facilitating the promotion of small businesses in attaining a level playing field in the market through various schemes

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Micro, Small and Medium Enterprises (MSMEs) form a vital component of the Indian Economy. Despite the continued efforts to empower these entities, MSMEs continue to face challenges of formalization, access to knowledge services, access to timely and adequate finance, improving competitiveness, availability of skilled manpower, access to the latest technology and marketing.


The MSME sector is yet to benefit from the advances in digitization, which can substantially reduce the cost and time for this sector. The sector was also affected in the recent past due to structural changes in the economy. Nonetheless, the evolution of an enterprise from micro to small and medium is a continuous process and the Indian government has been facilitating the small businesses in attaining a level playing field in the market.

Over the years, the Ministry of MSME with the support of other ministries has launched several schemes to address different needs of the ecosystem. In a recent Rajya Sabha address, the Union Minister for Micro, Small, and Medium Enterprises (MSMEs), Nitin Gadkari confirmed that the ministry is aiming to increase the number of MSMEs in India on a sustainable basis.

Marking the MSME day, there can be a better time to take a look at the most successful schemes the government has launched for benefitting the industry and how far have they come:

PMEGP - Credit-linked Subsidy Programme

Prime Minister's Employment Generation Programme (PMEGP), the credit linked subsidy programme launched during 2008-09 is administered by the Ministry of MSMEs. The program is aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth.

Gadkari shared that a total of 5.45 lakh micro enterprises have been assisted with a margin money subsidy of INR 12,074.04 crore, providing employment opportunities to an estimated 45.22 lakh persons since PMEGP's inception and till March 31, 2019. "An amount of Rs 2,247.10 crore has been allocated under PMEGP for the financial year 2019-20," he added.

CGTMSE – The Credit Guarantee Scheme

Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) focuses to establish a strong credit relief system to promote a better credit flow to the MSME sector. The scheme has extended guarantee cover to over 35 lakh enterprises leading to around 1 crore employment generations. During FY 2018-19, a total of 4,35,520 proposals have been approved, providing guarantee to a tune of Rs 30,168 crore.

SFURTI – A Scheme for Traditional Industries

Scheme of Fund for Regeneration of Traditional Industries (SFURTI), the scheme's objective is to organize the traditional industries and artisans into clusters to make them competitive and provide support for their long term sustained employment. Revamped in 2015, SFURTI has benefitted a total of 34,791 artisans with an assistance of INR 143.15 crore during 2018-19, Gadkari assured.

MSE-CDP – The Cluster Development Programme

MSME Ministry has adopted the cluster development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of MSEs and their collectives in the country and hence, the Micro and Small Enterprises-Cluster Development Programme (MSE-CDP). "During 2018-19, 17 Common Facility Centres and 11 Infrastructure Development projects have been established."

ASPIRE – Innovate the Rural Industry

The Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) was launched to set up a network of technology centres and incubation centres to accelerate entrepreneurship. The scheme also aimed also to promote startups for innovation and entrepreneurship in the agro-industry. 74 Livelihood Business Incubation (LBI) centres and 11 Technology Business Incubators have been approved since the inception of the ASPIRE.

The Indian government has been working relentlessly on the development of MSMEs through the above-mentioned schemes and more. Credit Linked Capital Subsidy Technology Upgradation Scheme (CLCS-TUS) and Coir Udyami Yojana are among the other important MSME programmes that deserve a mention.