**Executive Summary**
This document is the answer provided by the Minister of State for Micro, Small and Medium Enterprises to the Lok Sabha Unstarred Question No. 3197, which was scheduled to be answered on December 18, 2025. The questions relate to the MSME sector in Uttar Pradesh, including fund allocation, cluster development in Bundelkhand, potential priority region status for Bundelkhand, and additional incentives. The response provides data on fund allocation, details of existing schemes, and clarification regarding the Bundelkhand region.
**Key Points / Main Content**
* **Fund Allocation to Uttar Pradesh (2024-25):**
* Khadi Gramodyog Vikas Yojana (KGVY): ₹6962.11 lakh.
* Prime Minister's Employment Generation Programme (PMEGP): ₹24113.28 lakh.
* **Credit Guarantee Scheme (CGS):**
* Credit guarantee is provided for loans extended to MSEs without collateral security and third-party guarantee.
* Details of credit guarantees extended to MSEs under CGS in Bundelkhand region are provided in Annexure-I.
* **Micro and Small Enterprises - Cluster Development Programme (MSE-CDP):**
* The program aims to enhance the productivity and competitiveness of MSEs through the cluster development approach.
* One project for a flatted factory complex at UPSIC Industrial Area, Amausi, Lucknow, is approved for ₹34.30 crore with a Government of India grant of ₹10.50 crore for FY 2024-25.
* **International Cooperation Scheme (IC):**
* Financial assistance is provided on reimbursement basis to eligible Central / State Government organizations and Industry Associations.
* This supports the participation of MSMEs in international exhibitions, fairs, buyer-seller meets, conferences, and workshops.
* 158 MSMEs from Uttar Pradesh have been assisted over the last five years.
* **Bundelkhand Region:**
* No proposal for the establishment of MSME clusters in the Bundelkhand region has been received from the State Government under the MSE-CDP scheme.
* There is no proposal to declare Bundelkhand as an MSME Priority Region, and no criteria are presently under consideration for such a declaration.
* There are no additional incentives proposed to encourage MSMEs to set up units in Bundelkhand.
* **Annexure I: CGS - Guarantee Approved - Overall**
* Number of guarantees approved by Jhansi - 4,272 - ₹253 crore, Lalitpur - 2,127 - ₹89 crore, Banda - 2,257 - ₹111 crore, Hamirpur - 1,152 - ₹66 crore, Mahoba - 961 - ₹70 crore, Chitrakoot - 1,049 - ₹48 crore.
* Cumulative number of guarantees approved by Jhansi - 24,350 - ₹1,356 crore, Lalitpur - 9,891 - ₹424 crore, Banda - 9,400 - ₹555 crore, Hamirpur - 6,162 - ₹346 crore, Mahoba - 4,432 - ₹317 crore, Chitrakoot - 5,116 - ₹255 crore.
**Impact Analysis**
**Stakeholder: MSMEs in Uttar Pradesh**
* **Impact:** Determines the allocation of funds and support programs available to MSMEs in the state.
* **Action Required:** Review available schemes and funds to apply for relevant support, including the KGVY, PMEGP, CGS, and IC schemes.
**Stakeholder: Entrepreneurs in Bundelkhand region**
* **Impact:** Clarifies the absence of specific MSME cluster development proposals and priority region status.
* **Action Required:** Continue to engage with the State Government and advocate for MSME cluster development and incentive programs.
**Stakeholder: State Government of Uttar Pradesh**
* **Impact:** Provides information on central government support and schemes for MSMEs in the state.
* **Action Required:** Utilize available schemes and coordinate with the central government to propose MSME cluster development projects in the Bundelkhand region.
**Stakeholder: Traditional Artisans and Rural/Urban Unemployed Youths in Uttar Pradesh**
* **Impact:** Determines access to self-employment opportunities through the establishment of micro-enterprises in the non-farm sector.
* **Action Required:** Apply for Prime Minister's Employment Generation Programme (PMEGP) a credit linked subsidy.
Key Entities Referenced
Prime Minister's Employment Generation Programme (PMEGP): A credit-linked subsidy program aimed at generating self-employment opportunities through establishment of micro-enterprises.
Uttar Pradesh: The state where the MSME sector is being examined in this document.
Ministry of Micro, Small and Medium Enterprises: The ministry responsible for implementing schemes related to the MSME sector.
Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs): Scheme providing credit guarantees for loans extended to MSEs without collateral security.
Khadi Gramodyog Vikas Yojana (KGVY): Scheme of funds allocated to Uttar Pradesh State
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 3197
TO BE ANSWERED ON 18.12.2025
MSME SECTOR IN UTTAR PRADESH
3197. SHRI ANURAG SHARMA:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be please to state:
(a) the total funds allocated by the Union Government for the Micro, Small and Medium
Enterprises (MSME) sector in Uttar Pradesh for the financial year 2024-25, including the schemes under
which such funds have been earmarked;
(b) whether any proposals for the establishment of MSME clusters in the Bundelkhand region-
covering Jhansi, Lalitpur, Banda, Hamirpur, Mahoba and Chitrakoot-have been approved and if so, the
details of these clusters and their expected benefits for local entrepreneurship;
(c) whether the Government is considering declaring Bundelkhand as an MSME Priority Region
in view of its backwardness and employment potential, if so, the criteria being considered for such
classification; and
(d) whether additional incentives, such as credit facilitation, subsidised land or marketing support
are proposed to encourage MSMEs to set up units in Bundelkhand and if so, the details thereof?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a): The Government of India supplements the efforts of the States/UTs through various schemes,
programmes and policy initiatives for promotion, development of MSMEs in the country. The Ministry
of MSME implements Prime Minister's Employment Generation Programme, Credit Guarantee Scheme
for Micro and Small Enterprises and International Cooperation Scheme etc. Status of implementation of
these schemes in Uttar Pradesh implemented by the Ministry is as under:
(i) Prime Minister's Employment Generation Programme (PMEGP) is a credit linked subsidy
programme aimed at generating self-employment opportunities through establishment of micro-
enterprises in the non-farm sector by helping traditional artisans and rural/urban unemployed
youths through Margin Money subsidy.
Details of Funds allocated to Uttar Pradesh State during the year 2024-25 is as under:
Name of Scheme Funds allocated/disbursed/released
(Rs. In lakh)
2024-25
Khadi Gramodyog Vikas Yojana 6962.11
(KGVY)
Prime Minister’s Employment 24113.28
Generation Programme (PMEGP): 2 :
(ii) Under Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs), credit guarantee
is provided for loans extended to MSEs without collateral security and third-party guarantee
through Credit Guarantee Fund Trust for MSEs (CGTMSE). The details of credit guarantees
extended to MSEs under CGS in Bundelkhand region, Uttar Pradesh as per Annexure –I.
(iii)The Ministry is implementing Micro and Small Enterprises -Cluster Development Programme
(MSE-CDP) across the country. The objective of these scheme is to enhance the productivity and
competitiveness of Micro and Small Enterprises (MSEs) for their holistic development adopting
cluster development approach by providing financial assistance as GoI grant to establish Common
Facility Centers (CFCs) in the existing clusters and establish/up-grade infrastructural facilities in
new/existing industrial estates/areas/flatted factory complexes.
During FY 2024–25, one project for flatted factory complex at UPSIC Industrial Area, Amausi,
Lucknow, is approved at total project cost of ₹34.30 crore and Government of India grant of
₹10.50 crore.
(iv) Under International Cooperation Scheme (IC) Scheme, financial assistance is provided on
reimbursement basis to the eligible Central / State Government organizations and Industry
Associations to facilitate participation of MSMEs in international exhibitions/ fairs/ buyer-seller
meets held abroad and for organizing international conferences/ seminars/ workshops in India,
etc. Reimbursement is also provided to the first-time Micro & Small Enterprises for various costs
involved in export of goods and services. 158 MSMEs from Uttar Pradesh have been assisted
over the last five years.
(b): No proposal for establishment of MSME clusters in the Bundelkhand region has been received
from State Government under MSE-CDP scheme.
(c) and (d): There is no proposal to declare Bundelkhand as an MSME Priority Region and no criteria
for such a declaration are presently under consideration. There is no proposal for additional incentives to
encourage MSMEs to setup units in Bundelkhand.
****Annexure-I
Annexure referred to in reply to part (a) of the Lok Sabha Unstarred Question No. 3197 replied on
18.12.2025.
CGS - Guarantee Approved - Overall
FY 2025-26 Cumulative
as on Nov 30, 2025 as on Nov 30, 2025
No. of Amount No. of Amount
guarantees approved (in guarantees approved (in
approved Rs. crore) approved Rs. crore)
Jhansi 4,272 253 24,350 1,356
Lalitpur 2,127 89 9,891 424
Banda 2,257 111 9,400 555
Hamirpur 1,152 66 6,162 346
Mahoba 961 70 4,432 317
Chitrakoot 1,049 48 5,116 255
Uttar Pradesh 3,19,951 26,779 17,47,395 1,22,498
All India 15,52,645 2,50,001 1,30,63,982 11,84,872