Micro, Small, and Medium Enterprises (MSMEs) have emerged as significant contributors to India’s GDP, employment, and exports. According to the Ministry of MSME, India is home to over 63 million MSMEs, accounting for approximately 30% of the country’s GDP and providing employment to more than 110 million people. Recognizing their contribution, the Indian government has rolled out several schemes under the MSME Development Act 2006 aimed at encouraging the growth, competitiveness, and sustainability of MSMEs.
These schemes offer a much-needed enhancement in areas like credit access, technology upgradation, and marketing support. So, whether you are an entrepreneur looking to expand your business or a stakeholder interested in the growth of India’s economy, being aware of these schemes is important for understanding the full potential of MSMEs.
Here, we will be looking at the top Government MSME Schemes in India.
List of MSME Schemes in India
Below are the top 6 MSME schemes in India:
Prime Minister Employment Generation Programme (PMEGP)
The Prime Minister Employment Generation Programme (PMEGP) is a credit-linked subsidy program initiated by the Government of India to generate self-employment opportunities through the establishment of micro-enterprises in non-farm sectors.
Objectives:
- Generate employment opportunities in rural and urban areas
- Provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth
- Facilitate participation of financial institutions for higher credit flow to the micro-sector
Benefits:
- You can get 15% to 35% of your project cost covered
- You can borrow 90% to 95% of your project cost
- Loans up to ₹10 lakh don’t require any collateral
Eligibility:
- Individuals over 18 years of age
- Self-help groups, institutions registered under the Societies Registration Act, and production-based cooperative societies
- Existing businesses or have received government money for a business under any other scheme are not eligible for this scheme.
Application Process:
- Apply online through the official PMEGP e-portal.
- Submit the application with the project report and necessary documents.
- The application is then verified and forwarded to banks for loan sanction.
- After sanction, the subsidy is directly transferred to the beneficiary’s account.
Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE)
The Credit Guarantee Scheme (CGTMSE) was initiated to make available collateral-free credit to the micro and small enterprise sector.
Objectives:
- Strengthen the credit delivery system
- Facilitate the flow of credit to the MSE sector without the hassles of collaterals/third-party guarantees
- Build trust between lenders and borrowers in this sector
Benefits:
- Collateral-free credit facility up to ₹2 crore
- Covers both new and existing micro and small enterprises
- Guarantee cover ranges from 50% to 85% of the loan amount
Eligibility:
- New and existing micro and small enterprises with a valid Udyog Aadhaar Memorandum (UAM) and GST registration
Application Process:
- Apply through participating lending institutions (banks, financial institutions).
- Submit the necessary documents for loan processing.
- After the loan is sanctioned, the bank applies for a guarantee cover from CGTMSE.
Micro & Small Enterprises Cluster Development Programme (MSE-CDP) Scheme
The MSE-CDP Scheme aims to enhance the productivity and competitiveness of Micro and Small Enterprises (MSEs) by facilitating the creation of common facilities and improving infrastructure.
Objectives:
- Develop and upgrade infrastructure facilities
- Set up common facility centers (CFCs)
- Help you support with technology upgradation, skills, market access, and quality improvement
Benefits:
- Financial assistance of up to 90% for project costs related to common facility centers
- Support for infrastructure development in clusters
- Assistance with marketing, branding, and export promotion
Eligibility:
- Clusters of micro and small enterprises
- SPVs (Special Purpose Vehicles) representing clusters
- Implementing agencies like State Governments, their organizations, and NGOs
Application Process:
- Submit proposals to the Development Commissioner (MSME) through the State Government or their agencies.
- Proposals should include a detailed project report and other required documents.
- The proposal is appraised and approved by the Steering Committee.
Entrepreneurship and Skill Development Programme (ESDP) Scheme
The ESDP Scheme aims to build entrepreneurship and skill development among various segments of society to create a skilled workforce and promote self-employment.
Objectives:
- Develop an entrepreneurship culture
- Build capacity among potential entrepreneurs
- Provide skill development training to improve employability
Benefits:
- Training programs on entrepreneurship and skill development
- Workshops, seminars, and industrial visits
- Support for setting up self-employment ventures
Eligibility:
- Aspiring and existing entrepreneurs
- Youth, women, SC/ST, and differently-abled individuals
- Educational institutions and training organizations
Application Process:
- Apply through MSME Development Institutes or recognized training institutions.
- Submit application forms with the necessary documents.
- Attend training programs as per the schedule provided.
MSME Champions Scheme
The MSME Champions Scheme is an initiative to provide a holistic approach to the development and promotion of MSMEs, focusing on their growth and competitiveness.
Objectives:
- Create a conducive environment for MSMEs to become globally competitive
- Facilitate access to finance, technology, and markets
- Enhance productivity and performance of MSMEs
Benefits:
- Financial support for technology upgradation.
- Assistance in marketing and branding
- Support for research and development
Eligibility:
- All MSMEs registered with the Udyam Registration Portal
- Start-ups and innovative enterprises
- MSME clusters and associations
Application Process:
- Apply through the MSME Champions portal.
- Submit the required documents and project proposals.
- Proposals are evaluated, and eligible MSMEs are provided with the necessary support.
Raising and Accelerating MSME Performance (RAMP)
The RAMP scheme aims to improve the performance and competitiveness of MSMEs through policy and program interventions at the national and state levels.
Objectives:
- Strengthen institutions supporting MSMEs
- Enhance market access and competitiveness
- Foster innovation and technology adoption
Benefits:
- Support for policy and regulatory reforms
- Financial assistance for technology and infrastructure
- Capacity building and skill development initiatives
Eligibility:
- MSMEs registered under the Udyam Registration Portal
- State Governments and their agencies
- Industry associations and clusters
Application Process:
- Apply through the official RAMP scheme portal.
- Submit detailed project proposals and relevant documents.
- Proposals are reviewed and approved based on set criteria.
Conclusion
Government MSME schemes are designed to support both aspiring and existing entrepreneurs by offering financial assistance, skill development initiatives, and infrastructure support.
Together, MSME business loans and schemes have the potential to nurture a supportive environment and facilitate growth. These initiatives can contribute significantly to national economic development and job creation.
Frequently Asked Questions
What are MSME benefits?
MSME benefits include access to government schemes, subsidies, low-interest loans, credit guarantee support, tax exemptions, and easier access to finance and markets.
What is the limit of MSME?
The limits for MSMEs in India are:
- Micro: Investment up to ₹1 crore and turnover up to ₹5 crore
- Small: Investment up to ₹10 crore and turnover up to ₹50 crore
- Medium: Investment up to ₹50 crore and turnover up to ₹250 crore
Who is eligible for an MSME loan?
Micro, small and medium enterprises registered under the MSME Development Act are eligible for an MSME loan. Moreover, the enterprise should have a business plan and meet the lender’s creditworthiness requirements.
What is an MSME business loan?
An MSME business loan helps in providing funds to micro, small, and medium enterprises for various business needs such as expansion, purchasing equipment, working capital, and operational expenses.
What is the interest rate for MSME loans?
The interest rate for MSME loans depends on the lender, loan amount, tenure, and the borrower’s creditworthiness. Generally, MSME loans have competitive interest rates to support small businesses.
