This document summarizes a response to a question raised in the Lok Sabha on July 28, 2025, regarding the Pradhan Mantri Mudra Yojana (PMMY) and the state of the MSME sector.
The Minister of State in the Ministry of Finance clarified that there is no current proposal to increase the maximum loan limit under PMMY from Rs. 20 lakh to Rs. 50 lakh.
Regarding the MSME manufacturing sector, the Minister stated there is no empirical evidence suggesting distress due to monthly GST payments. However, several measures have been implemented based on GST Council recommendations to support MSMEs and small retailers. These include:
* Increasing the GST registration threshold for goods suppliers from Rs. 20 lakhs to Rs. 40 lakhs (effective April 1, 2019, excluding some special category states).
* Raising the turnover limit for the composition scheme from Rs. 75 lakhs to Rs. 1.5 crore (effective April 1, 2019, excluding some special category states).
* Introducing a Quarterly Return Filing and Monthly Payment (QRMP) scheme for taxpayers with turnover up to Rs. 5 crores.
* Streamlining the GST registration process to be fully online.
* Implementing deemed approval for registration applications if officers fail to act within prescribed timelines.
* Adding UPI/IMPS as an additional GST payment method.
Furthermore, the Union Budget 2025-26 includes financial relief and credit support packages for the MSME sector. Key components are:
* Credit guarantee cover doubled from Rs. 5 crore to Rs. 10 crore
* Credit guarantee cover for startups increased from Rs 10 crore to Rs 20 crore
* Increased investment and turnover limits for MSMEs.
* A new Fund of Funds.
* A Scheme for First-time Entrepreneurs.
* A Focus Product Scheme targeting the footwear/leather, toy, and food processing sectors.
Key Entities Referenced
Pradhan Mantri Mudra Yojana (PMMY): A government scheme aimed at providing financial assistance to micro and small enterprises.
Shri Giridhari Yadav: Member of Parliament who raised a question in Lok Sabha regarding PMMY.
Shri Dinesh Chandra Yadav: Member of Parliament who raised a question in Lok Sabha regarding PMMY.
Minister of Finance: The government official responsible for the Ministry of Finance.
Shri Pankaj Chaudhary: Minister of State in the Ministry of Finance who provided the answer to the Lok Sabha question.
Goods and Services Tax (GST): An indirect tax used in India on the supply of goods and services.
Micro, Small and Medium Enterprises (MSMEs): Businesses that fall under the classification of micro, small, and medium enterprises based on investment and turnover.
Union Budget 2025-26: The annual financial statement presented by the government, outlining the planned revenues and expenditures for the fiscal year.
Government of India
Ministry of Finance
Department of Financial services
LOK SABHA
UNSTARRED QUESTION NO. 1339
ANSWERED ON MONDAY, JULY 28, 2025/SRAVANA 6, 1947 (SAKA)
INCREASE IN MAXIMUM LIMIT OF LOAN UNDER PMMY
1339. Shri Giridhari Yadav:
Shri Dinesh Chandra Yadav:
Will the Minister of FINANCE be pleased to state:
(a) the features of Pradhan Mantri Mudra Yojana (PMMY); whether the Government is considering
to increase the current ceiling of loan under PM Mudra Yojana from Rs. 20 lakh to Rs. 50 lakh
keeping in view the success of the scheme;
(b) whether the MSME manufacturing sector is facing financial hardship and payment of GST every
month being the main reason;
(c) whether the Government is considering to bailout MSMEs from this crisis; and
(d) if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): No such proposal is under consideration at present.
(b): There is no empirical evidence to suggest that any distress of MSME manufacturing sector is due
to payment of GST every month. However, many steps have been undertaken on the
recommendations of GST council, to support MSMEs and small retailers in the country which are as
under:
(i) The threshold limit of annual turnover for registration under GST for entities engaged in supply
of goods has been increased from Rs. 20 lakhs to Rs. 40 lakh (other than some special category States)
effective from April 1, 2019;
(ii) The threshold limit of annual turnover for supply of goods under composition scheme has been
increased from Rs.75 lakhs to Rs. 1.5 crore (other than some special category States) effective from
1st April 2019;(iii) A scheme of quarterly return filing and monthly payment (QRMP) has been introduced where
small taxpayers with turnover up to Rs. 5 crores have an option to file returns on quarterly basis,
instead of monthly return;
(iv) GST registration process has been made completely online on the common portal;
(v) Deemed approval of application for registration where the proper officer fails to take action within
the prescribed timelines;
(vi) UPI & IMPS has been provided as an additional mode for payment of GST to facilitate taxpayers
and to further encourage digital payment.
(c) and (d): In addition, Government has announced financial relief and credit support packages for
the MSME sector through the Union Budget 2025-26, which includes:
Credit guarantee cover doubled from ₹5 crore to ₹10 crore (For Startups, from ₹10 crore to ₹20
crore);
Investment and turnover limits have been significantly increased;
New Fund of Funds;
Scheme for First-time Entrepreneurs;
Focus product scheme for footwear & leather sectors, toy sector and food processing.
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