Government Policies

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

• 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 over the next two years.
• 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 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.
• Direct Benefit Transfers (DBT) under the MSME ministry's schemes increased by 18.3% to Rs. 1,975.64 crore (US$ 236 million) until December FY23, compared to Rs. 1,668.99 crore (US$ 199 million) in the same period of FY22. The highest transfer was Rs. 1,505.61 crore (US$ 180 million) under the Prime Minister's Employment Generation Programme (PMEGP).
• 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.
• Since its establishment in 2008-09, as of November 30, 2023, the Prime Minister’s Employment Generation Programme has aided approximately 929,000 micro-enterprises, amounting to a subsidy of Rs. 34,517 crore (US$ 2.51 billion). This initiative has facilitated the creation of an estimated 7.836 million sustainable job opportunities.
• The total project cost of RAMP, for the five years FY 2022-23 to 2026-27 is Rs. 6062.45 crore (US$ 731 million), of which, World Bank support is Rs. 3750 crore (US$ 452 million).
• Since the initiation of the scheme, a cumulative of 580 projects have been granted approval, out of which 308 projects have been successfully completed. Within this pool of approved projects, 40 were sanctioned between January 2023 and December 2023, with an aggregate project cost nearing Rs. 560 crore (US$ 67.53 million). The Government of India extended support to these projects with a contribution of Rs. 386 crore (US$ 46.55 million). This initiative falls under the Scheme for Micro & Small Enterprises Cluster Development Programme (MSE-CDP).
• The "Vivad se Vishwas I-Relief to MSMEs" scheme was launched in May 2023 by the Department of Expenditure, Ministry of Finance, to provide relief to MSMEs during the COVID-19 period. The programme was announced by Union Finance Minister Ms. Nirmala Sitharaman in the Union Budget 2023-24.
• The Defence Ministry will procure 928 strategically important Line replacement units, subsystems, spares, and components from Indian MSMEs, as informed in May 2023.
• Through the Public Procurement Policy, the Central Government is promoting small-scale enterprises by purchasing the products of MSEs. In the financial year 2022-23, the government spent Rs. 60,432 crore (US$ 7.3 billion), which is 42% more than the target. 
• In February 2023, government revamped credit guarantee scheme for MSMEs to take effect from April 1, 2023, through the infusion of Rs. 9,000 crore (US$ 1.09 billion) in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs. 2 lakh crore (US$ 24.41 billion) and also reduce the cost of the credit by about 1%.
• In February 2023, government announced in budget 2023-24 that a unified Skill India Digital Platform to be launched in order to enable demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
• As on July 8, 2022, the number of loans sanctioned under the Pradhan Mantri MUDRA Yojana (PMMY) scheme was 10.03 million and the amount disbursed was Rs. 73,199.89 crore (US$ 9.15 billion).
• In the Union Budget of 2022-23 MSMEs sector was allocated an Emergency Credit Line Guarantee Scheme (ECLGS) of Rs. 50,000 crore (US$ 6.55 billion).
• On March 30, 2022, the Indian government allocated Rs. 6,062.45 crore (US$ 808 million) for the scheme Raising and Accelerating MSME Performance (RAMP). The programme aims to improve market and credit access, strengthen institutions and governance at the centre and state levels, improve centre-state connections and partnerships, resolve late payment difficulties, and green MSMEs.
• In November 2021, the Indian government launched the Special Credit Linked Capital Subsidy Scheme (SCLCSS) for the services sector. This scheme will help enterprises in the services sector meet various technology requirements.
• In November 2021, the Ministry of Micro, Small and Medium Enterprises launched SAMBHAV, a national-level awareness programme to push economic growth by promoting entrepreneurship and domestic manufacturing.