Executive Summary:
This document presents the Ministry of Micro, Small and Medium Enterprises' response to Lok Sabha Unstarred Question No. 3208, answered on August 7, 2025, regarding the impact of global and domestic economic conditions on MSMEs. It details the number of loans sanctioned and beneficiaries under the Prime Minister's Employment Generation Programme (PMEGP) and outlines steps taken to facilitate higher credit flow to MSMEs through banks.
Key Points / Main Content:
PMEGP Loan Sanctions and Beneficiaries:
* Annexure I provides state-wise data on the number of loans sanctioned and beneficiaries under PMEGP for FY 2022-23, 2023-24, and 2024-25, including data for Rajasthan.
* The decline in the number of loan sanctions and beneficiaries in 2024-25 is attributed to an increase in the average project cost per unit, leading to a higher outgo of margin money subsidy per unit, impacting the number of beneficiaries within the approved budget.
* Banks independently appraise projects and make credit decisions based on project viability.
Assessment of Economic Conditions Impact:
* NITI Aayog, with the Institute for Competitiveness, conducted an assessment resulting in a report titled "Enhancing MSMEs Competitiveness in India" addressing the impact of global and domestic economic conditions on MSMEs.
Steps to Facilitate Higher Credit Flow to MSMEs:
* Bank loans to MSMEs conforming to prescribed conditions qualify for classification under priority sector lending, as per RBI's Master Direction.
* Scheduled Commercial Banks (SCBs) are mandated not to accept collateral security for loans up to Rs. 10 lakh to MSEs.
* Collateral-free loans up to Rs. 10 crore are available to MSEs with guarantee coverage up to 90% through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) under the Credit Guarantee Scheme, effective April 1, 2025.
* The Udyam Assist Platform (UAP) was launched to bring Informal Micro Enterprises (IMEs) under the formal ambit for availing benefits under Priority Sector Lending (PSL).
* The Self Reliant India (SRI) Fund was established to infuse Rs. 50,000 crore as equity funding in viable MSMEs with growth potential.
* The Trade Receivables Discounting System (TReDS) was set up to facilitate the financing of trade receivables of MSMEs from corporates, government departments, and public sector undertakings (PSUs).
* The maximum project cost under PMEGP has been enhanced from Rs. 25 lakh to Rs. 50 lakh for the manufacturing sector and from Rs. 10 lakh to Rs. 20 lakh for the service sector.
Impact Analysis:
MSMEs:
* Impact: MSMEs are affected by changes in loan availability, collateral requirements, access to equity funding, and mechanisms for discounting trade receivables. Global and domestic economic conditions also directly impact their competitiveness.
* Action Required: MSMEs should leverage schemes like PMEGP, CGTMSE, SRI Fund, and TReDS to improve access to credit and equity. They should also register on the Udyam Assist Platform to avail PSL benefits.
Banks:
* Impact: Banks are impacted by mandates regarding priority sector lending, collateral-free loans, and participation in schemes like PMEGP and TReDS.
* Action Required: Banks need to adhere to RBI guidelines on priority sector lending, provide collateral-free loans to MSEs, and participate in PMEGP and TReDS to facilitate credit flow to MSMEs.
NITI Aayog and Institute for Competitiveness:
* Impact: These organizations are responsible for assessing the impact of economic conditions on MSMEs and providing recommendations for enhancing their competitiveness.
* Action Required: Continue to monitor the impact of economic conditions on MSMEs and provide policy recommendations to the government.
Government (Ministry of MSME):
* Impact: The government is responsible for implementing policies and schemes to support MSMEs and facilitate their access to credit and equity.
* Action Required: Monitor the effectiveness of implemented schemes, address challenges faced by MSMEs, and make necessary policy adjustments to promote their growth and competitiveness.
Key Entities Referenced
Prime Ministers Employment Generation Programme: A Government of India scheme to facilitate employment generation through setting up of micro-enterprises.
MSMEs: Micro, Small and Medium Enterprises, a sector of the Indian economy.
Rajasthan: A state in India used as a reference point in the policy document.
NITI Aayog: A policy think tank of the Government of India, involved in assessing the impact of economic conditions on MSMEs.
RBI: Reserve Bank of India
Priority Sector Lending: A type of lending that mandates banks to allocate a certain portion of their lending to specific sectors, including MSMEs.
Credit Guarantee Fund Trust for Micro and Small Enterprises: A scheme by the Government of India to provide collateral-free loans to MSEs.
Trade Receivables Discounting System: An electronic platform to facilitate the financing of trade receivables of MSMEs.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION No. 3208
TO BE ANSWERED ON 07.08.2025
IMPACT OF GLOBAL AND DOMESTIC ECONOMIC CONDITIONS ON MSMEs
3208. SHRI HARISH CHANDRA MEENA:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) the number of loans sanctioned and the number of beneficiaries under the Prime Minister’s
Employment Generation Programme (PMEGP) during 2022-23, 2023-24 and 2024-25 across the
country including Rajasthan;
(b) the reasons for the decline in the number of loan sanctioned and beneficiaries in 2024-25;
(c) whether any assessment has been carried out regarding the impact of global and domestic
economic conditions on MSMEs, if so, the details thereof; and
(d) the steps taken to facilitate higher credit flow to MSMEs through banks?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a): State-wise number of loans sanctioned and number of beneficiaries assisted under the Prime
Minister’s Employment Generation Programme (PMEGP) during the last three years i.e. FY 2022-23,
2023-24 and 2024-25 across the country including Rajasthan is given at Annexure I.
(b): Under PMEGP, Banks appraise the projects and take their own credit decision on the basis of
viability of each project. Therefore, the final sanction and release of loan is done at the level of
concerned Bank. There has been an increase in the average project cost per unit from Rs. 9.83 Lakh in
FY 2021-22 to Rs. 12.36 Lakh in FY 2024-25 resulting in higher outgo of margin money subsidy per
unit under the Scheme impacting the number of beneficiaries assisted as per availability of approved
Budget.
(c): An assessment has been carried out by NITI Aayog, in collaboration with the Institute for
Competitiveness, in the form of a comprehensive report titled “Enhancing MSMEs Competitiveness in
India” addressing the impact of global and domestic economic conditions on the MSME.: 2 :
(d): Steps taken by the Government to facilitate higher credit flow to MSMEs through Banks include
the following:
i. In terms of RBI’s Master Direction on 'Priority Sector Lending (PSL) - Targets and Classification',
all bank loans to MSMEs conforming to the conditions prescribed therein qualify for classification
under priority sector lending.
ii. Scheduled Commercial Banks (SCBs) have been mandated not to accept collateral securityin the
case of loans up to Rs. 10 lakh extended to units in MSE category.
iii. Collateral free loan up to a limit of Rs. 10 crore (w.e.f. 01.04.2025) to MSEs with guarantee
coverage up to 90%, for various category of loanare provided through Credit Guarantee Fund
Trust for Micro and Small Enterprises (CGTMSE) under Credit Guarantee Scheme.
iv. Launch of Udyam Assist Platform (UAP) to bring the Informal Micro Enterprises (IMEs) under
the formal ambit for availing the benefit under Priority Sector Lending (PSL).
v. Self Reliant India (SRI) Fund has been set up to infuse Rs. 50,000 crore as equity funding in those
MSMEs, which have the potential and viability to grow and become large units.
vi. The Trade Receivables Discounting System (TReDS) has been set up to facilitate the financing of
trade receivables of MSMEs from corporates and other buyers, including government departments
and public sector undertakings (PSUs) through multiple financiers electronically to solve the
problem of delayed payment to MSMEs.
vii. Enhancement of maximum project cost from Rs. 25 lakh to Rs. 50 lakh for manufacturing sector
and from Rs. 10 lakh to Rs. 20 lakh for service sector under Prime Minister’s Employment
Generation programme (PMEGP) thus enhancing the scope of the scheme.
*****ANNEXURE-I
ANNEXURE-I REFERRED TO IN REPLY TO PART (a) OF THE LOK SABHA UNSTARRED
QUESTION NO. 3208 FOR ANSWER ON 07.08.2025.
State wise number of loans sanctioned and the number of beneficiaries benefitted under PMEGP during
2022-23, 2023-24 and 2024-25 across the country including Rajasthan:
2022-23 2023-24 2024-25
No. of No. of
No. of
Sr. No. of Loan No. of Loan No. of
State Name Loan
No. beneficiaries sanctio beneficiaries sanctio beneficiaries
Sanction
benefited n by benefited n by benefited
by Bank
bank bank
1 Andaman Nicobar 315 121 340 135 195 61
2 Andhra Pradesh 5692 3073 11473 5577 7977 3249
3 Arunachal Pradesh 250 158 243 169 144 156
4 Assam 3897 2596 3734 2417 3236 3170
5 Bihar 8119 4459 12013 6837 7715 5035
6 Chandigarh 18 15 15 10 15 5
7 Chhattisgarh 3900 2543 3510 2379 2951 1853
8 Delhi 128 72 81 50 52 26
9 Goa 121 66 108 68 67 39
10 Gujarat* 4529 3071 4488 3000 2445 1783
11 Haryana 2487 1559 2762 1398 1925 788
12 Himachal Pradesh 1598 930 2072 974 1256 796
13 Jammu Kashmir 26785 12023 25606 15065 17579 9863
14 Jharkhand 2719 1851 3551 2101 2047 1452
15 Karnataka 8273 5618 7944 4672 6753 2839
16 Kerala 6196 3129 6401 3389 5837 2260
17 Ladakh 239 91 177 122 136 135
18 Lakshadweep 1 2 1 0 2 0
19 Madhya Pradesh 9241 5957 7777 5292 835 2626
20 Maharashtra** 6159 3625 6131 2766 5159 1857
21 Manipur 879 545 740 348 525 608
22 Meghalaya 886 306 1217 280 1027 1114
23 Mizoram 574 412 414 401 366 484
24 Nagaland 1228 469 1320 517 678 1262
25 Odisha 5327 3880 5174 2975 4708 1867
26 Puducherry 44 25 86 30 72 38
27 Punjab 2410 1564 3005 1469 2368 970
28 Rajasthan 3161 2037 3781 1678 3319 916
29 Sikkim 176 57 608 132 465 316
30 Tamil Nadu 11555 6140 16562 6814 12007 3949
31 Telangana 4543 2540 5833 2503 3857 1850
32 Tripura 1002 703 957 588 720 730
33 Uttar Pradesh 19678 11601 19562 11689 7421 5518
34 Uttarakhand 2431 1803 2176 1354 1056 734
35 West Bengal 3044 2126 2903 1919 2571 1359
Total 147605 85167 162765 89118 107486 59708
*including Daman and Diu ** including Dadra and Nagar Haveli