**Policy Summary: Support for Micro, Small, and Medium Enterprises (MSMEs)**
This policy overview, released on August 21, 2025, by the Ministry of Micro, Small and Medium Enterprises (MSME), outlines key programs designed to support entrepreneurship and economic growth, particularly in rural areas and among Scheduled Castes (SC) and Scheduled Tribes (ST) communities.
The **Prime Minister's Employment Generation Programme (PMEGP)**, implemented by the Khadi and Village Industries Commission (KVIC), is a central sector scheme focused on generating employment opportunities in rural areas. It achieves this by assisting prospective entrepreneurs in establishing new micro-enterprises within the non-farm sector. The PMEGP offers a higher subsidy rate and requires a lower own contribution for beneficiaries in rural areas and those belonging to Scheduled Castes, enhancing accessibility to the program.
To further empower SC/ST entrepreneurs, the Ministry of MSME implements the **National Scheduled Caste and Scheduled Tribe Hub** throughout the country, including Warangal. This initiative aims to strengthen the capacity of SC/ST entrepreneurs to participate in public procurement, working towards achieving the mandated 4% procurement target from SC/ST MSEs. The scheme provides professional support encompassing skilling, capacity building, market linkages, and finance facilitation, including assistance with tender bid participation.
The **Pradhan Mantri Mudra Yojana (PMMY)** provides collateral-free institutional credit, up to Rs. 20 lakh, for small enterprises through Member Lending Institutions (MLIs) such as Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs). Any individual with a viable business plan for a small enterprise operating in the manufacturing, trading, or service sectors is eligible. PMMY categorizes loans into four tiers: Shishu (up to Rs. 50,000), Kishor (above Rs. 50,000 and up to Rs. 5 lakh), Tarun (above Rs. 5 lakh and up to Rs. 10 lakh), and Tarun Plus (above Rs. 10 lakh and up to Rs. 20 lakh). The Tarun Plus category, effective from October 24, 2024, is specifically for entrepreneurs who have successfully repaid previous loans under the Tarun category.
This information was provided by the Minister of State for Micro, Small and Medium Enterprises, Sushri Shobha Karandlaje. Release ID: 2158990.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The central government ministry responsible for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India.
Prime Minister's Employment Generation Programme (PMEGP): A credit-linked subsidy program in India aimed at generating employment opportunities by assisting entrepreneurs in setting up micro-enterprises.
Khadi and Village Industries Commission (KVIC): An organization in India responsible for promoting and developing khadi and village industries.
Pradhan Mantri Mudra Yojana (PMMY): A scheme in India that provides collateral-free loans to small entrepreneurs through Member Lending Institutions.
National Scheduled Caste and Scheduled Tribe Hub: An initiative to support SC/ST entrepreneurs by enhancing their participation in public procurement.
Warangal, Telangana: A city in Telangana, India, where the National SC/ST Hub is being implemented.
Scheduled Castes (SC): Designated groups of historically disadvantaged people in India.
Scheduled Tribes (ST): Officially recognized tribal communities in India, often historically disadvantaged.
Ministry of Micro,Small & Medium Enterprises
PMEGP Provides Higher Subsidy and Lower Own
contribution for SC and Rural Beneficiaries
PMMY Provides Collateral-Free Loans up to 20 Lakh
for Small Enterprises
Posted On: 21 AUG 2025 2:12PM by PIB Delhi
Ministry of MSME, through Khadi and Village Industries Commission (KVIC), is implementing the Prime
Minister’s Employment Generation Programme (PMEGP). It is a central sector scheme generating
employment opportunities primarily in rural areas by assisting prospective entrepreneurs in setting up new
micro enterprises in the non-farm sector. Under PMEGP, beneficiaries belonging to rural areas and those
belonging to Scheduled Castes are covered under special category of beneficiaries who are eligible for higher
rate of subsidy and lower own contribution to the project cost.
The Ministry of MSME also implements the ‘National Scheduled Caste and Scheduled Tribe Hub’
throughout the country including Warangal for strengthening capacity of SC/ST entrepreneurs to
participate in public procurement and achieve the mandated 4% of procurement from SC/ST MSEs.
Several initiatives have been taken under the Scheme to provide professional support to SC/ST
entrepreneurs in skilling, capacity building, market linkages, finance facilitation, tender bid
participation etc.
Pradhan Mantri Mudra Yojana (PMMY), collateral free institutional credit is provided by Member
Lending Institutions (MLIs) i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks
(RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs). Any
individual, who is eligible to take a loan and has a business plan for small business enterprise can
avail loan up to Rs.20 lakh under PMMY for income generating activities in the manufacturing,
trading and service sectorsacross four loan categories, viz. Shishu (loans upto Rs. 50,000), Kishor
(loans above Rs. 50,000 and upto Rs. 5 lakh), Tarun (loans above Rs. 5 lakh and upto Rs. 10 lakh)
and Tarun Plus (loans above Rs. 10 lakh and upto Rs. 20 lakh- for those entrepreneurs who have
availed and successfully repaid previous loans under the ‘Tarun’ category w.e.f. 24.10.2024).
This information was given by the Minister of State for Micro, Small and Medium Enterprises Sushri
Shobha Karandlaje in a written reply in Lok Sabha today.
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AKS
(Release ID: 2158990)