**Policy Summary: Underutilisation of Funds under MSME Sector**
This document summarizes the Ministry of Micro, Small and Medium Enterprises' (MSME) response to Lok Sabha Unstarred Question No. 1900, concerning the underutilisation of funds within the MSME sector, specifically regarding the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) and other key MSME schemes. The question was raised on July 31, 2025, by Dr. Kalanidhi Veeraswamy.
The Minister of State for MSME, Sushri Shobha Karandlaje, addressed concerns about fund underutilisation by clarifying that the Ministry implements various Central Sector Schemes, including the Credit Guarantee Scheme (CGS), which do not have budget allocations at the State/Union Territory level.
The Ministry reported a high percentage expenditure against the budget allocated to the Ministry, with 99.46% in FY 2023-24 and 99.87% in FY 2024-25.
Regarding the Credit Guarantee Scheme (CGS), the Ministry highlighted a significant increase in guarantees extended to Micro and Small Enterprises (MSEs). Since its inception in 2000 up to 2022, 59.06 lakh guarantees were extended, amounting to ₹3.21 lakh crore. Following steps taken to improve the scheme's effectiveness, 56.04 lakh guarantees amounting to ₹6.12 lakh crore were extended within a three-year span from 2022 to 2025, indicating a significant enhancement in credit flow to MSEs.
To improve awareness and ease of access to credit, the Ministry of MSME conducts outreach programs through its field offices, in coordination with MSME Industry Departments of States/UTs, CGTMSE, SIDBI, Banks, and MSME Associations. These programs aim to educate micro and small entrepreneurs about the benefits of the CGS and other relevant schemes.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The Indian government ministry responsible for formulating policies and programs for the development of micro, small and medium enterprises.
Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE): A trust fund established to provide credit guarantee support to micro and small enterprises.
Tamil Nadu: A state in southern India, mentioned in the context of fund allocation and utilisation under MSME schemes.
Credit Guarantee Scheme (CGS): A central sector scheme implemented by the Ministry of MSME to provide credit guarantees.
SUSHRI SHOBHA KARANDLAJE: Minister of State for Micro, Small and Medium Enterprises.
SIDBI: Small Industries Development Bank of India, a financial institution involved in outreach programs.
2022-23: Financial year period for which the underutilisation of funds is being questioned.
2023-24: Financial year period for which the underutilisation of funds is being questioned.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 1900
TO BE ANSWERED ON 31.07.2025
UNDER-UTILISATION OF FUNDS UNDER MSME SECTOR
1900. DR. KALANIDHI VEERASWAMY:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether it is a fact that the Credit Guarantee Trust Fund for Micro and Small Enterprises
(CGTMSE) and several other key MSME schemes have witnessed under-utilisation of allocated
funds during the last two financial years;
(b) if so, the details of the funds allocated, released and actually utilised under CGTMSE and
other major MSME schemes during 2022-23 and 2023-24, scheme-wise within Tamil Nadu; and
(c) the corrective steps being taken by the Ministry to ensure full and timely utilisation of
allocated funds and to improve awareness, outreach and ease of access to credit and benefits of the
scheme among micro and small entrepreneurs?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a) and (b): The Ministry of Micro, Small and Medium Enterprises (MSME) implements various
Central Sector Schemes, including Credit Guarantee Scheme (CGS), wherein no budget allocations
are made State/UT-wise. The percentage expenditure with respect to the budget allocated to the
Ministry, during F.Y. 2023-24 and F.Y. 2024-25, is 99.46% and 99.87% respectively.
Further, under CGS, since inception in 2000 till 2022, 59.06 lakh guarantees have been
extended to MSEs amounting to ₹3.21 lakh crore. In view of various steps taken by the Ministry of
MSME to improve the effectiveness of the Scheme, 56.04 lakh guarantees have been extended to
MSEs amounting to ₹6.12 lakh crore within a short span of three years from 2022-25, significantly
enhancing credit flow to MSEs.
(c): To create awareness about the benefits of the Scheme and ease of access to credit among
Micro and Small Entrepreneurs in the country, outreach programmes are conducted by the field
offices of Ministry of MSME, in coordination with MSME/ Industry Departments of States/UTs
concerned and other stakeholders like CGTMSE, SIDBI, Banks, MSME Associations etc.
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