MSME Industry in India

Government Policies

The Government of India has designed various policies for the growth of MSMEs in the country.

• To create future MSME champions, the Union Budget FY27 announced a dedicated Rs. 10,000 crore (US$ 1.1 billion) SME Growth Fund. The fund is aimed at supporting scalable enterprises through targeted equity assistance and strengthening their ability to compete in domestic and international markets.
• Under PMEGP, more than 10.71 lakh micro enterprises have been supported since inception through margin money subsidies worth Rs. 29,249.43 crore (US$ 3.3 billion). The scheme has generated estimated employment for 87 lakh+ persons, reinforcing entrepreneurship-led livelihood creation.
• The Union Budget for FY26 has raised the investment limits for MSMEs by 2.5 times and doubled the turnover thresholds. Specifically, the new limits are as follows:
• In August 2025, The Government of India has strengthened MSME support through a Rs. 9,000 crore (US$ 1.09 billion) infusion in the Credit Guarantee Fund Trust, increased loan ceilings to Rs. 10 crore (US$ 1.16 million) with 90% coverage, subsidies under PM Employment Generation and PM Vishwakarma schemes, Rs. 50,000 crore (US$ 5.81 billion) equity via the Self-Reliant India Fund, enhanced payment dispute platforms, and RBI-led fintech credit initiatives.
• The Ministry of MSME has launched the MSE Trade Enablement and Marketing (MSE TEAM) initiative under the RAMP programme to digitally empower 5,00,000 MSEs, including 2,50,000 women-owned, through Open Network for Digital Commerce (ONDC) integration, eKhadi India, MSME Global Mart, and Government e-Marketplace (GeM), enhancing market access, e-commerce presence, and competitiveness.
• For micro-enterprises, the investment limit is now Rs. 2.5 crore (US$ 0.3 million), with a turnover limit of Rs. 10 crore (US$ 1.2 million).
• For small enterprises, the investment limit has been set at Rs. 25 crore (US$ 2.9 million), and the turnover limit is Rs. 100 crore (US$ 11.5 million).
• For medium enterprises, the investment limit is now Rs. 125 crore (US$ 14.4 million), while the turnover limit stands at Rs. 500 crore (US$ 57.6 million).
• The Union Ministry of Micro, Small, and Medium Enterprises has received an allocation of Rs. 23,168 crore (US$ 2.7 billion) in FY26 Union Budget, reflecting a 4.6% increase compared to the FY25 Budget.
• In December 2024, 5.70 crore MSMEs, with an employment of 24.14 crore are registered on Udyam Registration Portal and Udyam Assist Platform (UAP).
• Under Pradhan Mantri Mudra Yojana (PMMY), as of April 2025, over Rs. 33,65,000 crore (US$ 390.87 billion) was sanctioned under 52.37 crore Mudra loans to entrepreneurs of SMEs, particularly those belonging to marginal sections of society.
• In the first 100 days of Prime Minister Mr. Narendra Modi's third term, over Rs.3,148 crore (US$ 377 million) in loans have been disbursed under the Prime Minister Employment Generation Programme (PMEGP). This initiative has led to the establishment of more than 26,000 micro enterprises and the creation of approximately 210,000 jobs.
• The Ministry of MSME has increased the CGTMSE credit guarantee coverage for women-owned micro and small enterprises to 90%, benefiting approximately 27 lakh women-led MSEs and supporting the government's goal of providing Rs. 5 lakh crore (US$ 59.94 billion) in credit guarantees by 2026.
• The Telangana government has launched the "Telangana MSME Policy 2024," allocating Rs.4,000 crore (US$ 479 million) over five years to establish over 25,000 new MSMEs and enhance support for self-help groups, while focusing on key areas like finance access, raw material availability, and green technology adoption.
• The Union Government will launch a new special credit guarantee scheme providing up to Rs.100 crore (US$ 12 million) in collateral-free loans for Micro, Small, and Medium Enterprises (MSMEs), as announced by Union Finance Minister Mrs. Nirmala Sitharaman, with a particular focus on supporting Karnataka's 35 lakh MSMEs that contribute significantly to job creation.
• According to the Union Budget 2024 documents, Union Minister for Finance and Corporate Affairs, Mrs. Nirmala Sitharaman announced a crucial increase in the MUDRA loan limit for MSMEs from Rs. 10 lakh (US$ 11,988) to Rs. 20 lakh (US$ 23,977) for those who have successfully repaid their previous loans.
• The "Raising and Accelerating MSME Performance" (RAMP) scheme, launched in 2022, has benefitted 4 lakh micro, small, and medium enterprises, with women-owned businesses making up over 38% of the registered MSMEs, highlighting the government's focus on empowering female entrepreneurs.
• The Prime Minister’s Employment Generation Programme (PMEGP) has created approximately 8 million jobs and supported over 9.65 lakh micro enterprises since its inception in FY09, according to the MSME ministry. The scheme has provided more than Rs. 25,263.33 crore (US$ 3.03 billion) in subsidies and aims to enhance employment opportunities for traditional artisans and unemployed youth.
• Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) approves Rs 2 lakh crore (US$ 23.98 billion) guarantees in FY24, marking the highest ever in a single fiscal year, doubling from the previous year's figure, aimed at facilitating collateral-free loans to eligible MSMEs.
• The central government approves Rs. 114.80 crore (US$ 13.67 million) for Rajasthan under the Raising and Accelerating MSME Performance (RAMP) programme, aimed at boosting MSME enterprises in the state and enhancing their capacity to contribute to the goals of Developed India-Developed Rajasthan.
• The Centre approves Strategic Investment Plans (SIPs) for nine states, including Rajasthan, West Bengal, and Gujarat, under the Raising and Accelerating MSME Performance (RAMP) scheme, with a total funding of Rs 713 crore (US$ 85.49 million), aiming to reduce compliance costs and improve credit access for micro, small, and medium enterprises.
• The Self-Reliant India (SRI) fund, with a corpus of Rs 50,000 crore (US$ 6 billion), has invested Rs 7,593 crore (US$ 910 million) in 425 MSMEs, supporting sectors such as agriculture, pharma, auto, and chemicals, under the Aatmanirbhar Bharat package.
• In the interim budget 2024-2025, it was announced the establishment of a corpus totalling Rs. 1 lakh crore (~US$ 12 billion), offering 50-year interest-free loans. This initiative aims to incentivize the private sector, particularly MSMEs, to enhance research and innovation in emerging sunrise domains. 
• Since the launch of the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE), till November 30, 2023, guarantees amounting to Rs. 5,33,587 crore (US$ 64.35 billion) have been issued under the Credit Guarantee Scheme for Micro and Small Enterprises (CGMSE).
• The Department of Animal Husbandry & Dairying (DAHD) under the Ministry of Fisheries, Animal Husbandry and Dairying announced the launch of a new credit guarantee scheme. The scheme under the Animal Husbandry Infrastructure Development Fund (AHIDF) aims to facilitate collateral-free credit for MSMEs in the livestock sector. 
• Launched on 17th November 2023, the PM Vishwakarma Scheme provides holistic support to artisans and craftspeople, offering recognition, skill enhancement, tool incentives, credit aid, digital transaction bonuses, and marketing assistance, with a total financial outlay of Rs. 13,000 crore (US$ 1.57 billion) and a target of 30,00,000 beneficiaries by 2027-28.
• Under Pradhan Mantri Mudra Yojana (PMMY), In FY24, Rs. 5.41 lakh crore (US$ 64.87 billion) was sanctioned under 6.6 crore Mudra loans to non-corporate and non-farm MSEs.