**Executive Summary**
This document is a response to a parliamentary question regarding the cash crunch faced by start-ups and MSMEs, particularly in Bihar. The response outlines measures the Government of India has undertaken to support MSMEs through improved access to finance. The document references data up to FY 2024-25 and cites the Union Budget 2024-25.
**Key Points / Main Content**
* **Government Support Measures for MSMEs:**
* The Ministry of MSME implements the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), guaranteeing loans up to Rs. 10 crore.
* The Self-Reliant India (SRI) Fund was established to provide Rs. 50,000 crore as equity funding for MSMEs, with Rs. 10,000 crore from the Government of India and Rs. 40,000 crore through Private Equity/Venture Capital Funds.
* The Prime Minister's Employment Generation Programme (PMEGP) offers Margin Money subsidy up to 35% for new micro-enterprises in the non-farm sector, with project costs up to Rs. 50 lakh for Manufacturing and Rs. 20 lakh for Services.
* The PM Vishwakarma Scheme, launched on 17.09.2023, provides comprehensive support to artisans and craftspeople, including loans up to Rs. 3 lakh with a maximum interest subvention of 8%.
* **Financial Statistics Related to Bihar:**
* Credit outstanding to the MSME sector by Scheduled Commercial Banks (SCBs) in Bihar increased by 62.87% from FY 2022-23 to FY 2024-25, growing from Rs. 40029.60 crore to Rs. 63666.35 crore.
* The number of Credit Guarantees approved in Bihar increased from 42360 in FY 2022-23 to 2,21,458 in FY 2024-25, marking a growth of 19%. The amount of guarantee approved increased from Rs. 3468 crore to Rs. 14120 crore (25%).
* For PMEGP in Bihar, the number of units assisted increased from 4459 in FY 2022-23 to 5035 in FY 2024-25 (98% growth). Margin Money subsidy disbursed grew by 81%, from Rs. 12,123.2 crore to Rs. 15045.14 crore.
* **Outreach Programs:**
* The Ministry of MSME conducts regular outreach programs and stakeholder consultations to raise awareness about credit-related schemes.
* **Union Budget 2024-25 Initiatives:**
* The Union Budget 2024-25 introduced a package to support MSME growth, including:
* Fund of Funds for Startups
* Credit Cards for Micro Enterprises
* Export Promotion Mission
**Impact Analysis**
**MSMEs (including Start-ups) in Bihar and Across India**
* **Impact**
* MSMEs are directly impacted by the various government schemes and initiatives aimed at improving access to finance and providing credit support.
* These initiatives aim to alleviate the cash crunch faced by these enterprises.
* The provided data suggests a positive trend in credit access and subsidy disbursement in Bihar.
* **Action Required**
* MSMEs should explore and leverage the various schemes, including CGS, SRI Fund, PMEGP, and PM Vishwakarma Scheme, to access funding and support.
* They should actively participate in outreach programs and consultations to stay informed about available resources and opportunities.
**Financial Institutions (Banks, NBFCs, CGTMSE)**
* **Impact**
* These institutions are crucial in implementing the government's support measures by extending loans and providing credit guarantees.
* Increased credit disbursement and guarantee approvals impact their operational activities and portfolio management.
* **Action Required**
* Financial institutions should actively promote and implement the government schemes to facilitate lending to MSMEs.
* They need to coordinate with the Ministry of MSME and other stakeholders to ensure effective outreach and awareness of available credit facilities.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The primary ministry responsible for the schemes and initiatives mentioned in the response.
Bihar: The state specifically mentioned in the question and the response regarding MSME support.
Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs): A scheme implemented by the Ministry of MSME to provide credit guarantees for loans to MSEs.
Prime Minister's Employment Generation Programme (PMEGP): A program providing Margin Money subsidy for setting up new micro enterprises.
PM Vishwakarma Scheme: Scheme to provide holistic support to artisans and craftspeople.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 180
TO BE ANSWERED ON: 29.01.2026
CASH CRUNCH START-UPS IN MSMEs
180. SHRI ABHAY KUMAR SINHA:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether the Government has undertaken any assessment of the cash crunch faced by start-ups
and Micro, Small and Medium Enterprises (MSMEs) across the country including Bihar State and if so,
the details thereof, State-wise;
(b) whether any significant decline has been recorded in investment in the MSMEs sector in Bihar
during the financial year 2024-25 and if so, the details thereof along with the steps taken thereon;
(c) whether the Government has taken any specific steps in Bihar to address the 'funding winter’ and
shortage of financial resources prevailing in the start-up ecosystem and if so, the details thereof; and
(d) whether the Government proposes any new scheme or special initiative to provide credit
facilities and investment incentives for start-ups and MSME in Bihar including the Aurangabad Lok
Sabha constituency, if so, the details thereof?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a): The Government of India has taken a number of measures to provide support to Micro, Small
and Medium Enterprises (MSMEs) for improving access to finance and to bring the support of financial
resources in the ecosystem across the country, including Bihar. Some of them are:
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
(CGTMSE) 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.
iii. Prime Minister's Employment Generation Programme(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 Services enterprises.
iv. 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 of max up to 8%.: 2 :
(b) and (c): The Credit outstanding to MSME sector by Scheduled Commercial Banks (SCBs) in
Bihar has increased from Rs. 40029.60 crore in FY 2022-23 to Rs.63666.35 crore in FY 2024-25
registering a growth of almost 62.87%. As regards CGTMSE the number of Credit Guaranteesapproved
in Bihar has increased from 42360 in FY 2022-23 to 2,21,458 in FY 2024-25 registering a growth of
19%. The amount of guarantee approved increased from Rs. 3468 crore in FY 2022-23 to Rs 14120
crore in FY 2024-25 registering a growth of about 25%.
With respect to PMEGP in Bihar, the No. of Units Assisted for the FY 2022-23 stands at 4459
with Margin Money (MM) Subsidy disbursed of Rs. 12,123.2 crore whereas the No. of Units Assisted
for the FY 2024-25 stands at 5035 with Margin Money (MM) Subsidy disbursed of Rs. 15045.14 crore
registering a growth of almost 98% in terms of units assisted and about 81% in terms of Margin Money
(MM) Subsidy disbursed.
The Ministry of MSME organises outreach programmes /stakeholders’ consultations on regular
basis for MSMEs through its field offices in coordination with Department of Financial Services,
financial institutions, banks, NBFCs, CGTMSE and other stakeholders for spreading awareness about
various credit related schemes.
( d): Union Budget 2024-25 announced a package covering financial support for MSMEs to help them
grow, as given below:
(i) Fund of Funds for Startups;
(ii) Credit Cards for Micro Enterprises; and
(iii) Export Promotion Mission
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