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Oasis of MSME Government Schemes and Obstacles

MSME Scheme

Government has designed many good schemes for MSMEs till now. To support the MSMEs for ‘Atmanirbhar’ India vision.  But while introspecting practically, it seems difficult to avail. it’s like an ‘Oasis’ and not ‘Mirage’ so once you have proper navigator and lifebuoy your voyage will be definitely smooth and hassle-free. In this article we will adapt about the government schemes for MSMEs and obstacles in availing them.

MSME Definition as per Government as on July 2020

As per sub-section (9) of section 7 of the ‘Micro, Small and Medium Enterprises Development Act, 2006, MSMEs are W.E.F. 1st July 2020,

  • a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
  • a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;
  • a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

What are some major schemes for MSMEs?

1. Prime Minister Employment Generation Programme and Other Credit Support Schemes

Under the Prime Minister Employment Generation Programme and Other Credit Support Scheme, there are Three schemes

  • Prime Minister Employment Generation Programme (PMEGP):
    The PMEGP scheme is designed with the purpose of creating employment opportunities for the MSMEs in India. The scheme aims to assist the eligible person and give encouragement to establish MSME and indirectly to create employment opportunities to many.

       Eligibility Criteria:

    • An Individual, attaining 18 years of age, at least VIII standard pass is eligible for projects costing above Rs. 10 Lakh in the manufacturing sector and above Rs. 5 lakhs in the Service / business segment.
    • Under this scheme, only new projects will be considered for sanction.
    • Institutions registered under Societies Registration Act 1860, Charitable trusts, Production cooperative societies as well as Self Help Groups (Comprising the groups attached to BPL, who has not availed benefits under any other similar scheme) are also eligible for the PMEGP.

       Mode of Application:

    • The State and divisional directors of KVIC in consultation with KVIB as well as Director of Industries of concerned states will put advertisements locally through electronic and print media, inviting applications along with respected proposals from desirous beneficiaries.
    • On the other hand, the desirous beneficiaries can also submit their applications at and take the printout of the application and submit the same to respective offices along with other required documents and detailed Project report.
  • Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
    Ministry of MSME (Micro, Small and Medium Enterprises) and SIDBI (Small Industries Development Bank of India) has jointly established a trust known as Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement credit guarantee scheme for small and micro enterprises. The scheme has been designed to offer collateral-free credit to the micro and small enterprise sector. The fund corpus of this scheme is contributed by the Government of India and SIDBI.

       Eligibility Criteria:

    • In this scheme, both the existing as well as new enterprises can apply for the benefits.

       Mode of Application:

    • Eligible candidates can directly approach to the financial institutions/ Banks or he can also select Regional Rural Banks offering this scheme.
  • Interest Subsidy Eligibility Certificate (ISEC)
    The Interest Subsidy Eligibility Certificate also known as ISCE Scheme aims at moving and mobilizing the funds from financial and banking institutions to fill the gap between the availability of funds from budgetary sources and actual fund requirement. It aims at meeting the monetary shortfall which generally occurs to the MSMEs while establishing new business.

       Eligibility Criteria:

    • The Scheme supports to only the Khadi and Polyvastra segments. Institutions registered with State Khadi/ KVIC and KVIB’s (Khadi and Village Industries Boards) can apply for this scheme.
    • The institutions securing valid khadi certificate as well as sanctioned khadi Programme can also apply for this scheme.

       Mode of Application:

    • The Khadi institutions will apply to the financing bank for working capital along with the ISEC certificate issued by KVIC. Based on the working capital sanctioned, financing bank will raise the reimbursement claim to the nodal branch for the differential interest rate over and above 4%.

You can Read More about above schemes on

2.   Development of Khadi, Village and Coir Industries

Under the Development of Khadi, Village and Coir Industries there three major    schemes.

  • Market Promotion & Development Scheme (MPDA)
    The MPDA is a combination of various MSME assistance schemes which is implemented by the Khadi sector. The schemes’ portfolio comprises of marketing, publicity, market development assistance as well as market promotion activities.

       Eligibility Criteria:

    • The Khadi institutions, securing valid khadi certificate and also have categorized as A+, A, B and C only fits in eligibility criteria for availing grant from KVIC under MMDA scheme.

       Mode of Application:

    • The total amount of MMDA on production which has been claimed by producing unit from KVIC will be allocated amongst the various stakeholders including spinners and weavers, producing Institutions and selling Institutions in the ratio 40%, 20% and 40% respectively.
    • The producing institution will submit quarterly claim of MMDA which is based on the actual production attained during the prior quarter of the financial year.
    • If there is any difference it will be adjusted in the last quarter of that financial year based on the accounts audited by a chartered Accountant. The MMDA will generally reimbursed with electronic payment mode by the State/ Divisional office of the KVIC on the quarterly basis.
  • Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
    SFUTI scheme aims at preservation and organization of traditional industries by providing them sustainability in employment, enhancement in marketability, assistance to traditional artisans with the strong boost to the governance cluster systems.

       Eligibility Criteria:

    • Central Government, State government and Semi-Government institutions, NGOs, Panchayati Raj Institutions, State and Central Govt. field functionaries and other similar agencies with suitable expertise can apply.

       Mode of Application:

    • The eligible agencies have to submit the application to the KVIC, State Office and the proposal will be scrutinized at zonal level as well as state level before being submitted for the approval before the Scheme Steering Committee for the approval.
  • Coir Vikas Yojana (CVY)
    This scheme is designed to boost skill development of artisans for establishing, upgrading and modernizing new units under the CITUS (Coir Industry Technology Upgradation Scheme) and promote export as well as domestic market business. CVY includes below mentioned sub-schemes:

    1. Coir Industry Technology Upgradation Scheme (CITUS)
    2. Skill Upgradation & Mahila Coir Yojana (MCY)
    3. Science and Technology (S&T) for Coir
    4. Domestic Market Promotion Scheme (DMP)
    5. Export Market Promotion (EMP)
    6. Welfare Measures (Pradhan Mantri Suraksha Bima Yojana (PMSBY))
    7. Trade and Industry Related Functional Support Services (TIRFSS)

You can read more about above schemes on:

3. Technology Upgradation and Quality Certification

  • Support to MSMEs in ZED Certification Scheme
    The scheme aims at implementing and supporting Zero Defect & Zero Effect practices in manufacturing procedure. It designs constant enhancement and also supports Make in India Initiative.

       Eligibility Criteria:

  • All manufacturing MSMEs which secured Udyog Aadhar Memorandum are eligible for the application.

       Mode of Application:

  • The scheme involves 4 key steps:
    • Step 1 : Register free on the online portal of ZED (, using the following link:, using the valid (Indian) mobile number and email address.
    • Online self-assessment on the ZED parameters followed by Desktop Assessment.
    • Site-assessment, if selected on the basis of Desktop Assessment.
    • Consultancy: Rated MSMEs will have the option to avail the service of an authorized ZED consultant for handholding and gap-analysis.
  • A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
    ASPIRE aims at creating new employment opportunities and reducing unemployment. The scheme is made with the broad objectives of promoting entrepreneurship culture in India, boosting economic development, offering new and novel business primarily focusing on un-fulfilled social needs and enhancing innovations to achieve sustainable growth along with development of the MSME segment.
  • National Manufacturing Competitiveness Programme (NMCP) also comprises of bunch of sub-schemes mentioned below:
    1. Marketing Support/Assistance to MSMEs (Bar Code)
    2. Credit Linked Capital Subsidy for Technology Upgradation
    3. Lean Manufacturing Competitiveness for MSMEs
    4. Technology and Quality Upgradation Support to MSMEs
    5. Design Clinic for Design Expertise to MSMEs
    6. Entrepreneurial and Managerial Development of SMEs through Incubators
    7. Building Awareness on Intellectual Property Rights (IPR)
    8. Enabling Manufacturing Sector to be Competitive through QMS&QTT

You can read more about above schemes on:

4. Marketing Promotion Schemes

  • International Cooperation
    This scheme aims at providing global exposure to the MSMEs by assisting them in activists including visiting of MSME delegations to abroad countries for getting know how about modern technologies, enhancement, upgraded processes. It also includes the facilities such as participating assistance in international exhibitions, related business meets as well as various global trade fairs.

       Eligibility Criteria:

    • Government Institutions and Registered Industry Associations collaborated with development and promotion of MSME segment are eligible for the scheme.

       Mode of Application:

    • Applications for financial assistance under the scheme can be sent in the prescribed form to the Director (International Cooperation), Ministry of MSME, Udyog Bhawan, New Delhi -110011.
  • Marketing Assistance Scheme:
    This scheme aims at assisting MSMEs for organizing exhibitions at international level. The services comprise of participation in international trade fairs, exhibitions and intensive marketing promotion as well as campaigns.
  • Procurement and Marketing Support Scheme (P&MS)
    The P&MS scheme is designed to boost the MSMEs with exposure to domestic market and abroad opportunities. It aims at taking various initiatives and establishing business linkages towards markets. It also aims at effectively implementing Public Procurement Policy for MSEs and offer them appropriate information on various business segments.

You can read more about above schemes on:

  • Procurement and Marketing Support Scheme (P&MS)
    The P&MS scheme is designed to boost the MSMEs with exposure to domestic market and abroad opportunities. It aims at taking various initiatives and establishing business linkages towards markets. It also aims at effectively implementing Public Procurement Policy for MSEs and offer them appropriate information on various business segments.

You can read more about above schemes on:

5. Entrepreneurship and Skill Development Programme

  • Entrepreneurship Skill Development Programme (ESDP)
    ESDP scheme is designed for organizing Entrepreneurship Development Programmes on continuous basis to exhibit and promote the youth’s talent by enhancing their ability on various fields from the perspective of setting up MSEs.
  • Assistance to Training Institutions (ATI)
    This scheme aims at providing capital aids to the training institutes which comes under the Ministry of MSME at India level. Its purpose is to build strong infrastructure as well as support for the emerging SMEs through this training programs.

       Eligibility Criteria:

    • Existing State level EDIs as well as Institutions of Ministry of MSME are eligible for the scheme.

       Mode of Application:

    • Desirous institutions may send application to the Director/Deputy Secretary (EDI), Ministry of Micro, Small and Medium Enterprises, Udyog Bhawan, Rafi Marg, New Delhi – 110 011.

         You can read more about above schemes on:

6. Infrastructure Development Programme

  • Micro & Small Enterprises Cluster Development (MSE-CDP)
    This scheme offers financial aid for establishing CFCs (Common Facilities Centres) for R&D, testing, training facilities as well as creating and enhancing infrastructure facilities in the existing and new clusters and segments of MSMEs.

       Eligibility Criteria:

    • Industrial associations/Consortia as well as Clusters are eligible to apply for this scheme.

       Mode of Application:

    • Hardcopy of applications need to be sent through State Governments or their autonomous bodies or field institutes of the Ministry of MSME i.e., MSME- DIs. The proposals are to be approved by the Steering Committee of MSE-CDP.

Online applications can be filled at

You can read more on this scheme on :

There are more schemes also including

7. Scheme of Surveys, Studies and Policy Research

8. National SC-ST-HUB

9. Scheme of Information, Education and Communication

You can read about the above schemes on:

Latest Atamnirbhar bharat 3.0 announcement - Performance linked incentives for identified sectors- major takeaways

To boost the financial immunity of the COVID-19 affected Indian economy, Union Finance Minister, Nirmala Sitharaman has announced some stimulus measures on 12th Nov 2020 under Atmanirbhar Bharat 3.0 Abhiyaan.

Here are Some Major Takeaways:

  • With the Cabinet’s approval, Union Finance Minister has approved Production Linked Incentives (PLI) schemes for 10 special sectors known as champion sectors. The champion sector portfolio comprises food, technology products, textiles, electronic, auto- component manufacturing, automobiles and others.
  • The PLI scheme for 10 selected sectors will of 5 years duration and the estimated cost outlay for which is around Rs 1.46 lakh crore. The scheme aims at boosting health, competitiveness as well as efficiency of the domestic manufacturing which will ultimately augment growth of Indian Economy and protect the same from the COVID -19 pandemic.
  • The scheme majorly and mainly aims to rejuvenate the collapsed sectors during pandemic situation including infrastructure sector.
  • Additionally, Performance security on government contracts in the construction and infrastructure sector will be reduced to 3 per cent from 5-10 per cent. Earnest Money Deposit (EMD) will not be required for bid tenders and will be substituted by Bid Security Declaration. The relaxations will be applicable till the period of December 31, 2021.
  • An additional budget outlay will be there for capital and industrial expenditure.
  • A major chunk of Rs. 6,000 crores of equity will be infused by government in debt platform of (NIIF) National Infrastructure Investment Fund which is expected to aid the NIIF to raise around Rs. 1.1 lakh crore by year 2025 for infrastructure projects financing.
  • Centre also announces tax relief for developers and home buyers for houses up to Rs 2 crore. Earlier many years’ ago the govt. had announced ‘Sunset Clause’ with the same theme.
  • Further, the Govt. also launches credit guarantee support for the pandemic hit 26 stressed sectors.

What are the practical obstacles in availing these schemes?

  1. Lack of Proper Information
    Many times, the person who wants to avail of the scheme is unaware of it either fully or he/she may be having incomplete information.
    Due to lack of information, the beneficiary may not get the facility or have to face many hurdles. In these cases, Fin-Tech companies can help to the related person to get the proper information and documentation regarding the same.
  2. Delusion of the Information
    Sometimes due to various causes such as illiteracy or strong belief on some system, person may get into delusion about the scheme. The pipeline source from the upper side to the would-be beneficiary may not be proper or synchronized so it may either pass on wrong person or result in misleading information due to which the beneficiary may get confused.
  3. Inadequate documents and concerned unawareness
    Sometimes it may happen that would-be beneficiaries of the related scheme are not having adequate documents and also having unaware of it. For Instance, for Mudra Loan facility there is a tagline that person will get it without any collateral security. In this case, though there is no collateral or stringent process, it has to produce some basic fulfilling documents ad conditions so many times people misunderstand these factors and have a prejudiced view about the schemes or initiatives.
  4. Malpractices
    There are many malpractices also in between the pipeline which may alter either information or amount till the time, it is passed to the actual beneficiary of the scheme.

There are some effective and useful ways to avoid these obstacles such as Fin-Tech companies.

You can get detailed view at

Summing Up

There is plethora of various well-crafted beneficial schemes for MSMEs by Government. But to some practical hindrances, the would be assessee may get mis leaded and confused. In this case many support organizations may offer appropriate assistance.

The schemes are really hopeful in such critical situation like Covid -19, and will definitely give a necessary boost to the Indian Economy and indirectly to the MSMEs also, resulting into protecting Financial Immunity of the related sectors.

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