**Executive Summary**
This document outlines multiple government initiatives aimed at strengthening the Micro, Small, and Medium Enterprises (MSMEs) ecosystem in India, with a particular focus on rural and semi-urban areas. Key initiatives include credit guarantee schemes, equity funding, emergency credit lines, and mechanisms for timely payments. The information was presented to the Lok Sabha on March 12, 2026.
**Key Points / Main Content**
* **Credit Guarantee Scheme (CGS)**
* Administered by the Ministry of MSME through the Credit Guarantee Fund Trust for Micro and Small Enterprises.
* Provides credit guarantees for loans to Micro and Small Enterprises (MSEs).
* The ceiling for guarantee coverage is Rs 10 crore.
* **Self-Reliant India (SRI) Fund**
* Established to infuse Rs 50,000 crore as equity funding into MSMEs.
* Comprises Rs 10,000 crore from the Government of India and Rs 40,000 crore from Private Equity/Venture Capital Funds.
* An additional Rs 2,000 crore support was announced in the Budget 2026-27 to enhance the fund.
* **Emergency Credit Line Guarantee Scheme (ECLGS)**
* Launched in May 2020 under the Aatmanirbhar Bharat Package to support MSMEs and businesses facing operational challenges due to COVID-19.
* The scheme was operational until March 31, 2023.
* As of March 31, 2023, 1.13 crore guarantees valued at Rs 2.42 lakh crore were extended.
* **MSMED Act, 2006 and Delayed Payments**
* Sections 15-23 of Chapter V mandate payments to MSEs within 45 days.
* Micro & Small Enterprises Facilitation Councils (MSEFCs) are established in States/UTs to address delayed payment cases.
* The SAMADHAAN Portal, launched on October 30, 2017, facilitates filing and monitoring of payment cases and refers them to MSEFCs for dispute resolution.
* **Priority Sector Lending and Informal Micro Enterprises**
* Retail and wholesale traders were included under the MSME category for Priority Sector Lending (PSL) from July 2, 2021.
* The Udyam Assist Platform was launched on January 11, 2023, to integrate Informal Micro Enterprises (IMEs) into the formal financial framework and enable PSL benefits.
* Non-tax benefits have been extended for three years for MSMEs that transition to a higher classification.
* **Digital India Programme and MSME Support**
* The Ministry of Electronics and Information Technology (MeitY) offers digital infrastructure, governance, and services on demand for citizens and MSMEs.
* Various digital platforms and initiatives are supported, including Udyam Portal, MSME Champions Portal, Government e-Marketplace, and others.
* **Prime Minister's Employment Generation Programme (PMEGP)**
* Provides Margin Money subsidy up to 35% for new micro enterprises.
* Applicable to non-farm sector projects with costs of Rs 50 lakh for manufacturing and Rs 20 lakh for service enterprises.
* **PM Vishwakarma Scheme**
* Launched on September 17, 2023, to support artisans and craftspeople of 18 traditional trades.
* Offers end-to-end holistic support, including loans up to Rs 3 lakh with interest subvention up to 8%.
**Impact Analysis**
**Micro and Small Enterprises (MSEs)**
* **Impact:** Enhanced access to credit through guarantee coverage and equity funding. Support for operational liabilities and integration into formal financial systems. Mechanisms for addressing delayed payments and accessing digital services.
* **Action Required:** Avail credit guarantee schemes, explore SRI Fund and ECLGS (if applicable), utilize the SAMADHAAN Portal for payment disputes, and leverage digital platforms and PMEGP/PM Vishwakarma schemes.
**Retail and Wholesale Traders**
* **Impact:** Inclusion under the MSME category for Priority Sector Lending (PSL) benefits.
* **Action Required:** Understand and avail of PSL benefits based on their MSME classification.
**Informal Micro Enterprises (IMEs)**
* **Impact:** Opportunity to integrate into the formal financial framework and access PSL benefits through the Udyam Assist Platform.
* **Action Required:** Utilize the Udyam Assist Platform to formalize operations and gain access to financial benefits.
**Artisans and Craftspeople**
* **Impact:** Direct support through the PM Vishwakarma Scheme, including loans and interest subvention.
* **Action Required:** Engage with the PM Vishwakarma Scheme to access financial support and holistic services.
**Government of India and Ministry of MSME**
* **Impact:** Implementation and management of various schemes and platforms to strengthen the MSME sector. Facilitation of policy measures and financial support.
* **Action Required:** Continue to administer and monitor the effectiveness of these initiatives, provide necessary funding, and promote awareness among MSMEs.
Key Entities Referenced
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006: This act governs the development of MSMEs and includes provisions for payment timelines to MSEs.
Credit Guarantee Scheme (CGS): A scheme implemented by the Ministry of MSME to provide credit guarantees for loans to Micro and Small Enterprises.
Emergency Credit Line Guarantee Scheme (ECLGS): A scheme launched as part of the Aatmanirbhar Bharat Package to support MSMEs and business enterprises impacted by COVID-19.
PM Vishwakarma Scheme: A scheme providing holistic support, including loans and interest subvention, to artisans and craftspeople.
Ministry of Micro, Small & Medium Enterprises: The primary government ministry responsible for implementing policies and initiatives for MSMEs.
Ministry of Micro,Small & Medium Enterprises
Government Undertakes Multiple Initiatives to
Strengthen Rural and Semi-Urban MSMEs
Posted On: 12 MAR 2026 4:53PM by PIB Delhi
The Government has, inter-alia, undertaken the following measures at the policy level to enhance and
strengthen the Micro, Small and Medium Enterprises ecosystem in the country, including Rural and Semi-
Urban MSMEs:
i. Ministry of MSME implements Credit Guarantee Scheme (CGS) for Micro and Small
Enterprises (MSEs) through Credit Guarantee Fund Trust for Micro and Small Enterprises to
provide credit guarantee for loans extended to MSEs. The ceiling for guarantee coverage
under the scheme is Rs 10 crore.
ii. Self-Reliant India (SRI) Fund has been set up to infuse Rs. 50,000 crore as equity funding in
MSMEs with a provision of Rs. 10,000 crore from the Government of India and Rs. 40,000
crore through Private Equity/Venture Capital Funds. The Budget 2026-27 has also announced
a support of Rs 2000 crore to top up the Self-Reliant India Fund set up in 2021 to continue
support to micro enterprises and maintain their access to risk capital.
iii. The Emergency Credit Line Guarantee Scheme (ECLGS) was launched in May, 2020 as part
of Aatmanirbhar Bharat Package to support eligible MSMEs and business enterprises in
meeting their operational liabilities due to disruption caused by COVID-19 pandemic. The
Scheme was operational till 31.03.2023. As reported by Department of Financial Services,
under ECLGS, since inception till 31.03.2023, total 1.13 crore guarantees covering a value of
Rs.2.42 lakh crore have been extended to MSMEs.
iv. Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 under Section 15–
23 of Chapter V mandates payment to the MSEs to be made within 45 days. Under the
provisions of the MSMED Act, 2006, Micro & Small Enterprises Facilitation Councils
(MSEFCs) have been set up in the States/UTs to deal with cases of delayed payments of the
MSEs. For filing and monitoring the pending payment cases by MSEs against the buyers of
goods and services, the Government launched SAMADHAAN Portal on 30.10.2017. The
cases filed on the portal are referred to the concerned MSEFC for resolution of dispute
between the MSE seller and the buyer.
v. Retail and wholesale traders have also been included under the MSME category for the
purpose of Priority Sector Lending (PSL) with effect from 02.07.2021. To bring Informal
Micro Enterprises (IMEs) into the formal financial framework and enable them to avail PSL
benefits, the Udyam Assist Platform was launched on 11.01.2023. The Government has
further extended non-tax benefits for a period of three years in cases of upward transition of
MSME classification.
vi. Under the Digital India programme, the Ministry of Electronics and Information Technology
(MeitY) offers services on Digital Infrastructure as a Utility, Governance and Services on
Demand, Digital Empowerment of Citizens and MSMEs. Digital payments are also done by
MSMEs through different platforms. In order to improve and increase the integration of abovetechnologies to help MSMEs for digitalisation across the Country, Ministry of MSME, in
collaboration with stakeholders runs many initiatives, which inter-alia include the Udyam
Portal, MSME Champions Portal, Government e-Marketplace, Trade Receivables
Discounting System (TReDS), MSME Trade Enablement and Marketing Scheme, MSME
SAMBANDH, Prime Minister's Employment Generation Programme (PMEGP) Portal, Khadi
and Village Industries Commission Online, PM Vishwakarma Portal and Online Dispute
Resolution portal.
vii. PMEGP provides Margin Money subsidy up to 35%, for setting up of new micro enterprises,
in the non-farm sector with project cost of Rs. 50 lakh for Manufacturing and Rs. 20 lakh for
Service enterprises.
viii. PM Vishwakarma Scheme was launched on 17.09.2023 to provide end-to-end holistic support
to artisans and craftspeople of 18 traditional trades who work with their hands and tools. The
Scheme includes provision of loans up to Rs. 3 lakh with interest subvention up to 8%.
This information was given by the Minister of State for Micro, Small and Medium Enterprises Sushri
Shobha Karandlaje in a written reply in Lok Sabha today.
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Sunil Kumar Tiwari
E-Mail – hipessi[at]gmail[dot]com
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