What are the top 6 Government Schemes launched by MSME? 

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in the Indian economy, contributing significantly to employment generation, exports, and economic growth. To support and promote the development of MSMEs, the Indian government has introduced several schemes. This article provides an overview of key government schemes launched by MSMEs in India. 

What is an MSME?

You might have heard the term MSME. But what is an MSME? Let’s understand what MSME is. MSME full form is Micro, Small, and Medium Enterprises, which are key contributors to the economic growth and development of a country.  

In India, MSMEs are defined based on their investment in plant and machinery or equipment and their annual turnover. Micro enterprises have investments up to INR 1 crore and turnover up to INR 5 crore, small enterprises have investments up to INR 10 crore and turnover up to INR 50 crore, and medium enterprises have investments up to INR 50 crore and turnover up to INR 250 crore. 

MSMEs play a crucial role in employment generation, exports, and Gross Domestic Product (GDP) contribution. They are often referred to as the backbone of the Indian economy due to their significant impact on industrial output and innovation. 

What are the Government Schemes launched by MSME?

Various MSME schemes launched by government in India mainly to empower MSMEs. This section will highlight some of the top 5 MSME subsidy schemes. They are as follows; 

1. Prime Minister’s Employment Generation Program (PMEGP) 

PMEGP is a credit-linked subsidy scheme aimed at generating self-employment opportunities through the establishment of micro-enterprises in rural and urban areas. One can apply for PMEGP by submitting their applications online through the official PMEGP e-portal. Also, the process can be done offline by approaching local KVIC, KVIB, or DIC offices.  

• Objectives: 
  • To create self-employment opportunities in non-farm sectors. 
  • To provide sustainable employment continuously to a large segment of traditional and prospective artisans. 

• Key Features: 
  • Subsidy:
    • 15-35% of the project cost, varying by location and beneficiary category. 
  • Eligibility:
    • Individuals over 18 years, SHGs, Charitable Trusts, and Societies registered under Societies Registration Act, 1860. 
  • Loan Limit:
    • Up to INR 25 lakhs for manufacturing units and INR 10 lakhs for service units. 
  • Repayment:
    • 3-7 years after an initial moratorium of 6 months to 1 year. 

2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) 

CGTMSE provides credit guarantees to financial institutions to facilitate collateral-free loans to MSMEs. MSMEs should approach eligible lending institutions (e.g., banks, NBFCs) that are members of the CGTMSE scheme. The lending institution will process the loan application and seek a guarantee cover from CGTMSE. 

• Objectives: 
  • To make credit available to MSMEs without the need for collateral / third-party guarantees. 
  • Strengthen the credit delivery system and facilitate the flow of credit to the sector. 

• Key Features: 
  • Coverage:
    • Up to 85% of the loan amount. 
  • Loan Limit:
    • Up to INR 2 crore. 
  • Target Beneficiaries:
    • New and existing MSMEs engaged in manufacturing or service activities. 
  • Guarantee fee:
    • 1-1.5% of the loan amount per annum. 

3. Micro and Small Enterprises Cluster Development Program (MSE-CDP) 

MSE-CDP aims to enhance the productivity and competitiveness of MSMEs through cluster-based development. For applying for MSE-CDP, Proposals can be submitted to the Development Commissioner (MSME) through the state government. Detailed project reports (DPRs) are required for approval. 

• Objectives: 
  • To support the sustainability and growth of MSMEs. 
  • To upgrade the infrastructure facilities in existing clusters. 
  • To promote sustainable development through soft and hard interventions. 

• Key Features: 
  • Infrastructure Development:
    • Establishment of common facility centers (CFCs), upgradation of infrastructure. 
  • Soft Interventions:
    • Training, capacity building, market promotion, brand building. 
  • Financial Assistance:
    • Up to 80% of the project cost for infrastructure development. 

4. Scheme of Fund for Regeneration of Traditional Industries (SFURTI) 

SFURTI aims to promote cluster development in traditional industries and crafts to make them more productive and competitive. Proposals can be submitted to the Ministry of MSME through designated Nodal Agencies. A detailed project implementation plan is required for approval. 

• Objectives: 
  • To organize the traditional type industries and artisans into clusters making them competitive. 
  • To provide sustained employment for traditional industry workers. 

• Key Features: 
  • Cluster Development:
    • Establishment of common facilities, raw material banks, design centers. 
  • Financial Support:
    • Up to 90% of the project cost. 
  • Target Beneficiaries:
    • Artisans, traditional industry workers, NGOs, SHGs, and cooperatives. 

5. National Manufacturing Competitiveness Program (NMCP) 

NMCP aims to enhance the competitiveness of the manufacturing sector through various initiatives. MSMEs can apply through the NMCP website or the respective nodal agencies. Specific guidelines and application forms are available for each component of NMCP. 

• Objectives: 
  • To improve the quality and productivity of manufacturing MSMEs. 
  • To support the adoption of new technologies and management practices. 

• Key Features: 
  • Lean Manufacturing: Implementation of lean techniques to reduce waste and improve productivity. 
  • Design Clinic Scheme: Design support to enhance product design and packaging. 
  • Quality Management: Assistance in obtaining quality certification (e.g., ISO). 

6. Udyog Aadhaar Memorandum (UAM) 

UAM simplifies the registration process for MSMEs and provides them with a unique identification number. Registration process can be done online through the Udyog Aadhaar portal. The applicant needs to provide basic details such as Aadhaar number, industry name, and address. 

• Objectives: 
  • To facilitate easy registration of MSMEs. 
  • To provide a single-page registration process for MSMEs. 

• Key Features: 
  • Online Registration:
    • Free and easy registration process through the Udyog Aadhaar portal. 
  • Benefits:
    • Access to various government schemes, subsidies, and incentives. 
  • Eligibility:
    • All MSMEs, including micro, small, and medium enterprises. 

Conclusion

In conclusion, various MSME government scheme is launched in India. These MSME government scheme by the Indian government is to support the growth and development of MSMEs. The Government Schemes launched by MSME offer financial assistance, skill development, and infrastructure support, enabling MSMEs to thrive in a competitive market. MSMEs can access the resources needed to enhance their productivity and competitiveness. 

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