Module - 3

Micro, Small, and Medium Enterprises

(MSMEs)
 Topics to be Covered
• Introduction,
• Definitions of MEMEs,
• Rationale of MSMEs,
• Growth evaluation,
• Share of MSMEs in Indian GDP,
• Problems and prospects of MSMEs,
• Programmes/Schemes for MSMEs Development by State and Central
Government,
• Recent measure,
• Relevant Case studies & articles.
Introduction
• The MSMEs sector has emerged as a highly vibrant and dynamic
sector of the Indian economy over the last five decades.
• It contributes significantly in the economy and social development
of the country by fostering entrepreneurship and generating large
employment opportunities at comparatively lower capital cost, next
only to agriculture.
• MSMEs are complementary to large industries as subsidiary units
and this sector contributes significantly in the inclusive industrial
development of the country.
• The MSMEs are expanding their domain across sectors of the
economy, producing diverse range of products and services to meet
demands of domestic as well as global markets.
• In India, the sector has gained significant importance due to its
contribution to Gross Domestic Product (GDP) of the country and
exports.
• It helps in industrialization of rural and backward areas.
• It is reducing regional imbalance assuring more equitable distribution of
national income and wealth.
• India’s MSMEs base is the largest in the world after china. (Around 50
per cent of the nation's tax revenue and 60 per cent of China's gross
domestic product (GDP) come from SMEs).
• MSME industries are the backbone and have been acknowledged as the
engine of economic acceleration of the Indian economy.
Definitions of MEMEs
Pictures of MSMEs in India
Share of MSMEs Gross Value Added (GVA) in all India Gross Domestic
Product (GDP)

Share of MSMEs GVA in

Year
All India GDP (in %)
2014 - 15 29.34
2015 - 16 29.48
2016 -17 29.25
2017-18 29.70
2018-19 30.50
2019-20 30.50
2020-21 27.30
2021-22 29.60
2022-23 30.10

Source: Ministry of Statistics & Programme Implementation, Government of India

Share of export of MSME specified products in all India exports

% share of Export of MSME related

Year
products in All India Export

2019-20 49.75%

2020-21 49.35%

2021-22 45.03%

2022-23 43.59%

2023-24 45.73%

2024-25 (up to May 2024) 45.79%

Source: Directorate General of Commercial Intelligence and Statistics (DGCIS), Government of India
 Budgetary Outlay, Government of India

Rs. in Crores
Financial Year Budget Estimates Revised Estimates Actual
2019-20 7,011.29 7,011.29 6,717.53
2020-21 7,572.20 5,664.22 5,647.50
2021-22 15,699.65 15,699.65 15,160.47
2022-23 21,422.00 23,628.73 23,583.90
2023-24 22,137.95 22,138.01 22,094.25
2024-25 22,137.95 16,468.42 3,992.73
(as on 12.11.2024)

Source: MSMEs Annual Report - 2024

 Estimated Number of MSME (Activity Wise)

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Distribution of Enterprises Category Wise

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Percentage Distribution of Enterprises in rural and
urban areas (Male/ Female ownership and category wise)

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Percentage distribution of enterprises owned by Male/ Female

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Percentage Distribution of enterprises by social group of owner
in rural and urban Areas

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Percentage Distribution of Enterprises Social Category
Wise

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Estimated Employment in the MSME Sector (Activity Wise)

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Distribution of employment by type of Enterprises in Rural
and Urban Areas

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Distribution of workers by gender in rural & urban areas

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 State-wise Distribution of estimated MSMEs

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
 Distribution of MSMEs in Top Ten States

Source: MSMEs Annual Report 2023-24;

As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics &
Programme Implementation during the period 2015-16,
MSME Udyam Registration
 Rationale of MSMEs
• Economic Growth and Contribution to GDP:
• 2022-23: 30.1%; 2017-18: 29.7%
• Employment Generation:
• As on 21.0 1.2025, 24,74,09, 027 as per Udyam Registration Portal
• Promoting Innovation and Entrepreneurship:
• Export and Trade:
• Exports from ₹3.95 lakh crore in 2020-21 to ₹12.39 lakh crore in 2024-25,
• No. of exporting MSMEs: 2020-21 - 52,849; 2024-25 - 1,73,350
• 45.73% to exports in 2023-24, which increased to 45.79% by May 2024,
• Regional and Rural Development:
• Financial Inclusion:
• Social Impact:
• Flexibility and Adaptability:
• Minimum overhead expenses and Cheap labour
 Problems and Prospects of MSMEs
Problems of Indian MSMEs:
1. Access to Finance:
Credit Gap:
• According 2022 report by the Lok Sabha Standing Committee on Finance, GoI & SME
Chamber of India, MSMEs face a credit gap of over ₹20 -25 lakh crore.
• About 47% of MSME credit demand remaining unmet,
• This is largely due to challenges in accessing formal credit,
• About 85% of MSMEs are still dependent on informal sources of financing (family,
friends, and money lenders).
• Non-performing Assets (NPAs):
• Banks’ MSME NPAs at 4.4% as of March 2024: FinMin of GoI.
• The gross NPAs in MSME loans by SCBs had declined by 14 per cent to Rs 1.31 lakh crore
in FY23 from Rs 1.54 lakh crore in FY22
Non-performing assets (NPA) rate of micro, small, and medium enterprises (MSME) in
India from September 2019 to March 2021
2. Market Access and Competition:
• A survey by the Federation of Indian Chambers of Commerce & Industry (FICCI) found that 70% of MSMEs
have limited access to the broader market due to insufficient marketing resources and infrastructure.
• Only 10-15% of MSMEs export their products.
• MSMEs face fierce competition from large enterprises.
• Around 80% of Indian MSMEs in sectors like textiles and food processing are unable to compete with
international brands due to price pressures and lack of resources.
3. Technology Adoption:
• Digital Adoption:
• A report by NASSCOM highlighted that only 25% of MSMEs in India have fully embraced digital
transformation.
• Many of them still rely on traditional methods of production, marketing, and sales.
• Technology Gaps:
• The Indian MSME sector lags behind in adopting Industry 4.0 technologies such as automation, AI, and IoT.
• According to a CII report, 80% of MSMEs still work with outdated machinery, impacting their productivity
and efficiency.
4. Skilled Labor Shortage:
• Labor Skills: According to the Ministry of Skill Development and Entrepreneurship (MSDE),
47% of MSMEs report facing challenges due to a shortage of skilled labor, especially in areas like
technology, quality control, and management.
• Training Deficit: Only 25% of MSMEs provide training to their employees, compared to 60% of
large enterprises, which limits the growth potential of their workforce.
5. Regulatory and Compliance Challenges
• Complex Taxation: According to the National Small Industries Corporation (NSIC), MSMEs
spend 20-30% of their time dealing with compliance and regulatory matters, impacting their
productivity.
• Tax Burden: MSMEs contribute to around 45% of India’s manufacturing output but face high tax
compliance costs and regulatory complexities, making it difficult for them to scale.
6. Business expertise /Lack of professionalism
• Lack the business intelligence needed to run an enterprise
• Ex. Funding & financing, tracking sales, managing input & output cost
7. Procurement of raw material –
• Lack of bulk orders, credit facilities and transportation of raw material make the
procurement tedious
8. Hiring -
• MSMEs struggle to hire skilled and competent manpower
• Lack of name recognition of the company reduces the talent pool
• inability to offer competitive salary, job security and career development opportunities
9.Lack of Innovation
10. Infrastructural constraints
11. Stiff competition from giant businesses
12. Overall management - Inadequate management skills
13. Inadequate margin
14. Problems in frequent inspection
 Prospects of MSMEs in India
1. Economic Contribution and Growth Potential
• MSMEs contribute around 30% to India’s GDP and 45% to total exports.
• They generate employment for over 110 million people, second only to agriculture.
• The sector is expected to grow significantly due to digitalization, innovation, and globalization.
2. Government Support and Policy Initiatives
• Atmanirbhar Bharat Package – Financial assistance, credit guarantee, and tax relief for MSMEs.
(Rs. 20 lakh crore (US$ 268.74 billion), which amounts to ~10% of India’s GDP)
• Udyam Registration – Simplified registration process to access benefits.
• Credit Schemes – MUDRA loans, SIDBI assistance, and CGTMSE (Credit Guarantee Fund Trust
for Micro and Small Enterprises).
• More than 40.82 crore loans amounting to ₹23.2 lakh crore sanctioned under Pradhan Mantri
MUDRA Yojana (PMMY) since inception. (as on 08.04.2023)
• The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme has
facilitated more than ₹2.5 lakh crore in credit guarantees to MSMEs.
• Production-Linked Incentive (PLI) Schemes – Encouraging manufacturing and export-oriented
MSMEs. (₹2500 Crores)
• Cluster Development Programs – Enhancing competitiveness and infrastructure support.
• Subsidies and Schemes: Over 5 million MSMEs have benefited from government schemes like the
Technology Upgradation Fund Scheme (TUFS) and the National Manufacturing Competitiveness
Program (NMCP).
3. Digital Transformation and Innovation
• Adoption of Industry 4.0 (AI, IoT, automation) is improving productivity.
• Rise of e-commerce platforms (Amazon, Flipkart, ONDC) is expanding market access.
• Digital payment systems (UPI, digital wallets) are making transactions faster and easier.
• E-Commerce Growth: The IBEF reports that India's e-commerce market is expected to
grow to $200 billion by 2026. MSMEs are increasingly tapping into this opportunity, with
platforms like Amazon, Flipkart, and IndiaMart providing a digital marketplace for
MSMEs.
• Digital Payments: As per the Digital India initiative, the volume of digital transactions in
India has grown significantly, with over ₹55 lakh crore worth of digital transactions
processed in 2022 alone. MSMEs are increasingly adopting digital payment systems to
streamline business operations.
• NASSCOM found that MSMEs that adopt digital technologies can increase their
productivity by up to 20%.
• MSMEs that use social media to engage with customers can increase their customer
satisfaction by up to 25%.
• It is also found that MSMEs that use online marketing can increase their sales by up to
15%.
• The World Bank found that MSMEs that use digital financial services can increase their
access to finance by up to 50%.
• Boston Consulting Group found that MSMEs that adopt digital technologies are more
likely to innovate than those that do not.
4. Emerging Sectors for MSMEs:
• Green and Sustainable Businesses – Renewable energy, waste
management, organic farming.
• Technology Startups – AI, blockchain, cybersecurity, and fintech MSMEs.
• Health and Pharma – Demand for medical devices, generic medicines, and
telemedicine solutions.
• Export-Oriented Units – Handicrafts, textiles, and food processing for
international markets.
5. Export Potential & Local Sourcing
• Export Contribution: According to the Export Promotion Council for Handicrafts (EPCH),
MSMEs contribute approximately 45% of India's total exports. Engineering goods, textiles, and
handicrafts are some of the key sectors where MSMEs have a strong export presence.
• Global Trade Opportunities: India's export of MSME goods reached $417 billion in 2023, showing
substantial growth in global market access.
• Global Supply Chains: India’s MSMEs are increasingly integrated into global supply chains. For
example, MSMEs in sectors like automobiles and electronics supply to major international
companies, including Toyota, Hyundai, and Apple.
• Local Sourcing: The Make in India initiative has boosted the local production capacity of MSMEs.
According to the Ministry of MSME, MSMEs are expected to play a major role in reducing India's
import dependence in sectors like electronics, machinery, and automobiles.
6. Innovation and Product Diversification
• Research and Development: The Government of India has committed ₹10,000 crore to encourage
innovation and R&D in MSMEs through programs like the Technology Development Fund
Scheme.
• Startups and Innovation: There are over 1,40,803 (as on 30.06.2024) startups in India, many of
which are MSMEs involved in technology, biotech, and renewable energy. These sectors present
substantial opportunities for MSMEs to innovate and expand.
7. Sector-Specific Growth
• Agri-Tech and Food Processing: India’s food processing sector, which is largely driven by
MSMEs, is expected to grow from $322 billion in 2020 to $470 billion by 2025, with the
government promoting agribusiness as a key area for MSME growth.
• Healthcare and Pharmaceuticals: India’s pharmaceutical industry, which includes a significant
number of MSMEs, is projected to reach $130 billion by 2030. MSMEs in the sector benefit from
both domestic and international demand.
8. The MSME sector is expected to grow to $1 trillion by 2028.
9. MSMEs are expected to continue to contribute to the country's GDP, exports, and employment.
10. MSMEs are expected to continue to be a source of entrepreneurship and self-employment
opportunities.
Future Outlook:
• 5 Trillion-Dollar Economy Goal – MSMEs are expected to play a crucial role.
• Global Supply Chain Integration – India emerging as an alternative to China in manufacturing.
• Sustainability and ESG Compliance – Green MSMEs gaining traction.
• Increased Foreign Investments – MSMEs benefiting from Make in India and FDI policies.
Programmes/Schemes for MSMEs Development by State and
Central Government
 Programmes/Schemes for MSMEs Development by Central
Government

• The Ministry of MSMEs, Government of India runs numerous schemes targeted at

1. Providing credit and financial assistances,
2. Skill development training,
3. Infrastructure development,
4. Marketing assistance,
5. Technological and quality upgradation and,
6. Other Services for the MSME across the country.
1. Providing Credit and Financial Assistances
I. Prime Minister’s Employment Generation Programme (PMEGP)
• The scheme aims to generate employment opportunities in rural as well as urban areas of
the country through setting up of new self-employment ventures, projects and micro
enterprises.
• The scheme also seeks to provide continuous and sustainable employment to all
segments of traditional and prospective artisans and rural/urban unemployed youth in
the country, so as to help arrest migration of rural youth to urban areas.
• The scheme also focuses to increase the wage earning capacity of artisans and contribute
to increase in the growth rate of rural and urban employment.
• The Scheme is implemented by Khadi and Village Industries Commission (KVIC), as the
nodal agency at the National level.
• At the State level, the scheme is implemented through State offices of KVIC, State Khadi
and Village Industries Boards (KVIB), District Industries Centres (DIC), Coir Board (for
coir related activities) and Banks.
• The maximum cost of the project or unit admissible under manufacturing sector is Rs.50
lakh and under business or service sector is Rs.20 Lakh.
• Since inception in 2008-09 till 31.03.2024, a total of about 9.58 lakh micro
enterprises have been assisted with a Margin Money subsidy of Rs. 24,964
Crore and
• Provided employment to about 78.24 Lakh persons.
• Out of the total units set up under PMEGP, around 80% are in rural areas and
around 20% are in urban areas.
• More than 50% units belong to women, SC and ST. Around 15% units are
setup in Aspirational Districts.
• The Maximum project cost admissible for setting up of new project has been
enhanced from Rs.25 Lakhs to Rs.50 Lakhs in Manufacturing Sector and from
Rs.10 Lakhs to Rs.20 Lakhs in Service Sector Units.
PMEGP Performance 2020-21 to 2023-24
II. 2nd Loan for up-gradation of the existing PMEGP, REGP and
MUDRA Units
• The Ministry of MSMEs has also introduced the further financial assistance
scheme for expansion or upgrade the existing PMEGP, REGP and MUDRA
units for manufacturing and Service or Trading units from the year 2018 -
19.
• The maximum cost of the project under manufacturing sector for up-
gradation is Rs. 1.00 Crore and Rs. 25.00 Lakh under Service or Trading
sector.
• Maximum subsidy would be 15% of the project cost (20% for NER and Hill
States) i.e., Rs. 15.00 Lakh in Non-NER and Rs. 20.00 Lakh for NER and Hill
States.
• The balance amount of the total project cost will be provided by Banks as
Term Loan.
• For the benefit of potential beneficiaries, 1056 Model Projects of different KVI
activities have been placed on PMEGP e-portal.
 III. Credit Guarantee Fund Trust For MSE (CGTMSE) - Provision of
Collateral Free Credit for MSME
• Guarantees are provided for extending collateral free loans to Micro and Small
Enterprises through banks and financial institutions (including NBFCs).
• The Scheme covers collateral free credit facility (term loan and/ or working capital)
extended by eligible lending institutions to micro and small enterprises up to Rs. 5 crore
(w.e.f. 01.04.2023) per borrowing unit.
• The guarantee cover provided under this scheme is upto 85 % depending upon the
quantum of loan and type of beneficiary.
• A nominal amount towards an Annual Guarantee Fee for the credit facility sanctioned
is charged on the outstanding loan amount.
• As on 31 March 2024, since inception cumulatively 87.96 lakh proposals have been
approved for guarantee cover of Rs. 6.29 lakh crore.
• In order to facilitate additional credit of 2 lakh crore for Micro and Small Enterprises,
Credit Guarantee Scheme for Micro and Small Enterprises was revamped and
subsequent to the Budget announcement 2023-24, Rs. 9,000 crore has been infused in
the corpus of CGTMSE,
• This Scheme has covered more than 87 lakh beneficiaries in the last
23 years.
• The beneficiaries have experienced a boost in their turnover as well
as employment generation in the years subsequent to CGTMSE
funding.
• This has had a positive impact on major areas in the MSE sector, viz.
technology upgradation, skill upgradation, market development,
economic impact, and social impact.
• The Scheme has been expanding itself geographically across the
country with a special focus in the North East.
• The benefits of the Scheme have also reached more than 100
industrial sectors in which MSE are operating.
• The beneficiaries are not just limited to major industrial hubs but are
spread even in tier 3 towns. CGTMSE has been highly effective in
settling the claims.
2. Schemes for Skill Development and Training
 I. A Scheme for Promotion of Innovation, Rural Industry &
Entrepreneurship (ASPIRE)

• It is the Scheme of Ministry of MSMES, GoI.

• To support the establishment of Livelihoods Business Incubation (LBI)
centers.
• Objectives of the Scheme:
• (i) Create jobs and reduce un-employment,
• (ii) Promote entrepreneurship culture in India,
• (iii) Promote innovation to strengthen the competitiveness of MSME
sector.
Component under the Scheme:
• (i) Livelihood Business Incubator (LBI): is an entity setup for imparting
skill development and incubation programs for promoting
entrepreneurship and employment generation in agro-rural sector with
special focus on rural and underserved areas.
• (ii) ASPIRE FOF managed by SIDBI: was created with a focus to invest
through Alternate Investment Funds (AIF), in early-stage start-ups in need
of support and nurturing to succeed in developing technology & business
enterprise in the areas of innovation, entrepreneurship, developing
forward and backward linkages with multiple value chain of
manufacturing & service delivery in the agro-based sector.
• The total corpus of SIDBI FoF is Rs 310 cr.
 Status/Progress:
• Till 31.03.2024, 109 Livelihood Business Incubators (LBI) and 22
Technology Business Incubators (TBI) have been approved.
• 77 LBI and 14 TBI have already become functional.
• A total of 1,01,012 beneficiaries have been trained in the 77
functional LBI, of which 18044 trainees got self-employed and
12,381 trainees got employed in agro rural sector.
• Additionally, 451 micro enterprises have been supported or
established till date.
• 11 Alternative Investment Fund (AIF) have been committed a total
of Rs. 217.5 cr out of the total corpus Rs. 310 cr under ASPIRE FoF.
• 03 LBI were approved in 2023-24.
 II . Entrepreneurship and Skill Development
Programmes (ESDP)
• The objective of the programme is to motivate youth
representing different sections of the society including SC/ST,
Women, differently abled, Ex-servicemen and BPL persons to
consider self employment or entrepreneurship as one of the
career options.
• The ultimate objective is to promote new enterprises, build
capacity of existing MSME and inculcate entrepreneurial
culture in the country.
• This scheme (ESDP) is implemented across the length and
breadth of the country.
 Components of ESDP
• Entrepreneurship Awareness Programme (EAP) – Duration- One Day, 50-
100 participants, costing Rs. 20000/- per programme
• Entrepreneurship cum Skill Development Programme (E-SDP)- Minimum
6 Weeeks Programme, 25 participants, Cost- Rs. 1,25,000/- per
programme.
• Advance E-SDP- This component is newly added , which costs Rs. 10.00
Lakhs (max.) per programmes to be conducted by premier Institutes like
IIT, IIM, ICAR, BARC, Agricultural Universities of State or Central
Governments.
• Management Development Programme (MDP) – Minimum One Week, 20-
25 particiapnts, cost-Rs. 50,000/- per programme.
• Advance MDP: Costs Rs. 10.00 lakhs per programme to be conducted by
premier institutes like Advance E-SDP components.
3. Schemes for Infrastructure Development-Support
through Cluster Approach
 I. Scheme of Fund for Regeneration of Traditional Industries
(SFURTI)

• The objective of the scheme is to organize traditional industries and

artisans into clusters to make them competitive and provide support for
their long term sustainability, sustained employment,
• To enhance marketability of products of such clusters, to equip traditional
artisans of the associated clusters with the improved skills,
• To make provision for common facilities and improved tools and
equipment for artisans, to strengthen the cluster governance systems with
the active participation of the stakeholders, and
• To build up innovative products, improved technologies, advanced
processes, market intelligence and new models of public-private
partnerships.
 The Scheme covers three types of interventions:

• (i) Soft interventions – Activities to build general awareness, counselling,

skill development and capacity building, exposure visits, market
development initiatives, design and product development, etc.
• (ii) Hard interventions – Creation of common facility centres, raw material
banks, upgradation of production infrastructure, warehousing facility, tools
and technological upgradation, etc.
• (iii) Thematic interventions – Interventions on a cross-cutting basis for
brand building, new media marketing, e-commerce initiatives, research and
development, etc.
• The financial assistance provided for any specific project shall be subject to a
maximum of Rs. 5 (five) crore to support Soft, Hard and Thematic
interventions.
Status:
• Under the Scheme of Fund for Regeneration of Traditional
Industries (SFURTI), from the year 2015 to 10th December 2023,
513 clusters have been approved with GoI grant worth Rs. 1335
crore that will benefit about 3.03 lakh artisans.
• 87 of these clusters are approved in North-eastern Region.
• During the period 01-04-2023 and 31-03-2024, 15 SFURTI cluster
proposals have been approved and 50 clusters have become
functional.
 II. Micro and Small enterprises Cluster Development
Programme (MSE-CDP)

• The Ministry of MSME is implementing Micro and Small Enterprises -

Cluster Development Programme (MSE-CDP) for development of clusters.
• The objective of the scheme is to enhance the productivity and
competitiveness of Micro and Small Enterprises (MSE) by extending
financial assistance as Government of India (GoI) grant for establishment
of Common Facility Centers (CFC) in the existing clusters and for
establishment of new or upgradation of existing Industrial Areas, Estates
and Flatted Factory Complex.
• MSE-CDP is a demand driven scheme and Central Sector Scheme.
 i. Common Facility Centers (CFC):

• The GoI grant will be restricted to 70% of project cost (Rs. 5.00 crore - 10.00
crore) and 60% of project cost (Rs. 10.00 crore - 30.00 crore).
• In case of NE & Hill States, Island territories, Aspirational Districts, LWE
affected districts and clusters with more than 50% micro/village or
women owned or SC/ST owned units, GoI grant will be 80% of project
cost (Rs. 5.00 crore - 10.00 crore) and 70% of project cost (Rs. 10.00 crore -
30.00 crore).
• The CFC project with cost more than Rs. 30.00 crore can also be considered
but the GoI assistance would be calculated by taking into account the
maximum eligible project cost of Rs.30.00 crore.
 ii. Infrastructure Development:
• The GoI grant will be restricted to 60% of project cost (Rs. 5.00 crore - 15.00 crore) for
setting up of new Industrial Estate / Flatted Factory Complex.
• The GoI grant will be 50% of project cost (Rs. 5.00 crore - 10.00 crore) for up-gradation of
existing Industrial Estate / Flatted Factory Complex.
• In case of NE & Hill States, Island territories, Aspirational Districts, LWE affected
districts and clusters with more than 50% micro/village or women owned or SC/ST
owned units, GoI grant will be 70% of project cost (Rs. 5.00 crore - 15.00 crore) for setting
up of new Industrial Estate / Flatted Factory Complex and 60% of project cost (Rs. 5.00
crore - 10.00 crore) for upgradation of existing Industrial Estate / Flatted Factory
Complex.
• The ID project with cost more than Rs. 10.00 crore/15.00 crore can also be considered but
the GoI assistance would be calculated by taking into account the maximum eligible
project cost of Rs. 10.00 crore/15.00 crore.
Achievement - Year-wise data during the FY 2017-18 to
2023-24
4. Scheme for Marketing Assistance
 I. Modified Market Development Assistance (MMDA)

• Government has introduced w.e.f 01.04.2010, a flexible, growth stimulating

and artisan oriented Market Development Assistance (MDA) Scheme, in place
of the erstwhile system of Rebate.
• The financial assistance being extended currently under MMDA for
Cotton/Muslin, Wool and Polyvastra shall be calculated @ 35% on Prime Cost
(cost of raw material + conversion charges up to grey cloth+ processing
charges), excluding margin [establishment expenditure (25%) and trading
(3%), insurance (1%) & bank interest (4%)] and for Silk Khadi shall be
calculated @ 20% on Prime Cost (cost of raw material + conversion charges up
to grey cloth + processing charges), excluding margin [establishment
expenditure (25%) and trading (3%), insurance (1%) & bank interest (4%)].
• The quantum of MMDA shall be distributed to the KI of Cotton/ Woolen
Khadi & Polyvastra- (i) producing institutions (34%), (ii) Selling institutions
(17%), (iii) Artisans (35%) & (iv) Karyakartas (14%).
• Where a Khadi institution is involved both in production and selling activities,
the amount of assistance shall be 51% of the MMDA and in case of Silk Khadi the
quantum of MMDA shall be distributed to the KIs (i) producing institutions
(40%), (ii) Selling institutions (20%), (iii) Artisans (30%) & (iv) Karyakartas (10%).
• Where a Khadi institution is involved both in production and selling activities,
the amount of assistance shall be 60% of the MMDA.
• The producing institutions shall utilize their entitled MMDA for procuring tools
& equipment / up-gradation of technology, engaging designers & consultants
for improving the existing designs and introduction of new designs, Value
addition to post fabric process and Engaging technicians for maintenance of
Charkhas, Looms and other equipment.
• The selling Institutions shall utilize their entitled MMDA for all sales
promotional activities by way of introduction of computerization, bar-coding,
billing, debit / credit card swiping machine, accounts, renovation of sales
outlets, Introduction of mobile sales van, participation in domestic and
international exhibitions, Extension of sales discount or discount on whole sales
for clearance of stock and Capacity building of sales personnel.
• Intended beneficiaries:
• Khadi Institutions (KI) affiliated/ registered with KVIC, State/UT KVIB,
State/ UT KVIB units holding valid Khadi/Polyvastra and Khadi Mark
Certificate and whose annual budget duly approved by KVIC.
• Funds Allocated (2023-24): BE: Rs 269.76 crore
• Expenditure incurred (upto 31.03.24): Rs. 265.59 crore
5. Scheme for Technology Upgradation and
Competitiveness
 I. MSME Champions Scheme
• MSME Champions scheme has been formulated by merging all 6
components of erstwhile Technology Upgradation Scheme (TUS) for a
period of 5 years i.e., 2021-22 to 2025-26.
• It is a holistic approach to unify, synergize, and converge various schemes
and interventions with a single purpose.
• The end objective is to pick up clusters and enterprises and modernize
their processes, reduce wastages, sharpen business competitiveness, and
facilitate their National and Global reach and excellence.
• There are 3 components under the MSME Champions scheme, the details
of which are as below:
• 1. MSME-Sustainable (ZED) Certification Scheme
• 2. MSME-Competitive (Lean) Scheme
• 3. MSME-Innovative (for Incubation, IPR and Design) Scheme

• The Digital MSME will be interlinked with all the other components of the
MSME Champions Scheme.
• BE/RE for MSME Champions Scheme: Rs. 52.72 Cr/Rs. 88.82 Cr (2023-24).
 1. MSME-Sustainable (ZED) Certification Scheme
• MSME Sustainable (ZED) Certification is an extensive drive to create
awareness amongst MSME about Zero Defect Zero Effect (ZED) practices
and motivate & incentivize them for ZED Certification while also
encouraging them to become MSME Champions.
• Through the journey of ZED Certification, MSME can reduce wastage
substantially, increase productivity, enhance environmental consciousness,
save energy, optimally use natural resources, expand their markets, etc.
• MSME will also be motivated to adopt best practices in work culture,
standardization of products, processes, systems, etc. in order to enhance
their global competitiveness and sustainability.
• The ZED Certification aims at enhancing the competitiveness of an MSME
through assessment, handholding, managerial and technological
intervention, etc.
• Intended Beneficiaries: Udyam Registered manufacturing MSME.
Nature of Assistance
• Cost of Certification
• i. Certification Level 1: BRONZE: Rs. 10,000/-
• ii. Certification Level 2: SILVER: Rs. 40,000/-
• iii. Certification Level 3: GOLD: Rs. 90,000/-
• Subsidy on cost of ZED certification:
• i. Joining Reward of Rs. 10,000/- (Bronze will become free if availed)
• ii. 80%-60%-50% for Micro, Small and Medium enterprises respectively.
• iii. 100% Subsidy for Women Owned MSME
• Additional subsidy:
• i. 10% for SC/ST owned MSME OR MSME in NER, Himalayan, LWE,
Island territories and aspirational districts.
• ii. 5% for MSME which are also a part of the SFURTI OR Micro & Small
Enterprises - Cluster Development Programme (MSE-CDP) of the
Ministry.
• Financial Assistance in Testing, Quality and Product Certification:
• i. Up to 75% of the total cost of Testing/Certification, with the maximum
ceiling of subsidy being Rs. 50,000/-
• Handholding/Consultancy Support:
• i. Up-to Rs.2 lakh for handholding or Consultancy in order to achieve the
next Certification Level.
• Support in Technology Upgradation for Zero Effect Solutions:
• i. Up-to Rs. 3 lakhs for moving towards zero effect solutions or pollution
control measures or cleaner technology.
 Achievement/ Status in the Year 2023-24
MSME-Sustainable (ZED) scheme was launched on 28 April 2022.
• i. Over 2,52,000 nos. of MSME registered under MSME Sustainable
(ZED) certification Scheme in FY 2023-24.
• ii. 1,75,367 Bronze, 428 Silver, and 539 Gold certifications have been
awarded in FY 2023-24 to the MSME and the remaining registered
MSME are under process for certification.
• iii. 18 States/UTs have included ZED in their respective Industrial
Policies and offering additional incentives to ZED certified MSME
• iv. 18 Banks have come forward and notified incentives to ZED
certified MSME in the form of concessions in processing fee and rate
of interest.
• v. Certification cost for Women-owned MSME have been made zero.
II.MSME-Innovative (for Incubation, IPR, Design and Digital MSME)

• MSME Innovative is a new concept for MSME with a combination of

innovation in incubation, design intervention and by protecting IPR in a
single mode approach to create awareness amongst MSME about India’s
innovation and motivate them to become MSME Champions.
• This will act as a hub for innovation activities facilitating and guiding
development of ideas into viable business proposition that can benefit
society directly and can be marketed successfully.
The scheme has 3 sub-components:
A. Incubation
B. Design
C. IPR
Intended Beneficiaries: Udyam Registered manufacturing MSME.
 Particulars MSME-Innovative (Incubation) MSME-Innovative (Design) MSME-Innovative (IPR)
/Scheme
Objective To Promote & support untapped To bring Indian manufacturing To improve the IP culture in India
creativity of sector and
individual and to promote adoption of Design expertise/ fraternity on to
latest technologies in manufacturing as a common platform.
well as knowledge based innovative
MSME
Nature of • Developing and nurturing the ideas- Design Project: 75% of the total A Grant of up to Rs. 1 crore would be provided to an IPFC
Assistance max. of Rs. 15 lakh per idea to HI. project cost will be contributed by in milestone-based (three or more) instalments.
GoI up to a maximum of Rs. 40 Reimbursement for registration of Patent, Trademark,
• Financial assistance for Plant and lakh. Geographical
Machinery to HI up to Rs. 1.00 cr. Indications (G.I.), Design:
(max) - shall be provided for Student Project: 75% of the total The maximum financial assistance:
procurement and installation of project cost will be contributed by i. Foreign Patent: up-to Rs. 5.00 lakh
relevant plant and machines GoI up to a maximum of Rs. 2.5 ii. Domestic Patent: up-to Rs. 1.00 lakh
including hardware and software, lakh iii. GI Registration: up-to Rs. 2.00 lakh
etc. iv. Design Registration: up-to Rs. 0.15 lakh
v. Trademark: up-to Rs. 0.10 lakh

Achievement/ Host Institutes (HIs) approved: 697 nos. MoU has been signed- 1 with IISc, No. of IP Facilitation Centres approved: 20
Status in the ii. 397 ideas approved in MSME Idea Bangalore, 7 IIT, 12 NIT ii. No. of Reimbursement for Patent – 25
Year 2023-24 Hackathon, 3.0 (Women) ii. No. of Professional Design iii. No. of Trademark reimbursement- 170
/Student Projects approved: 23 iv. No. of Design reimbursement- 21
iii. 77 Awareness programme and v. Additional initiatives: IP Outreach Mission in
6 National Level workshops Aspirational Blocks,
approved GI Facilitation to identified potential GI Products under
One District
One GI Programme, IP Yatra
 III.MSME-Competitive (Lean)
To enhancing the competitiveness of MSME Sectors through implementation
of Lean Tools and Techniques. Lean Tools and Techniques are a tested and
proven methodology for improving the competitiveness of MSME sector.
Achievement/ Status in the Year 2023-24
• MSME-Competitive (Lean) Scheme was launched on 10th March 2023.
• • Registration in Scheme: 10890
• • Pledge in Scheme: 10847
• • Lean Basic Certified: 5144
• GOI Contribution/Financial Assistance:
• Basic Level: NA
• Intermediate Level: MSME unit will be entitled for up to Rs. 1,08,000 (max.)
towards the Implementation cost (Taxes Extra)
• Advanced Level: MSME unit will be entitled for up to Rs. 2,16,000 (max.)
towards the Implementation cost (Taxes Extra)
6. Other Schemes for the MSME across the country
 I. Raising and Accelerating MSME Performance (RAMP)
Scheme

• RAMP is a World Bank supported Central Sector Scheme aimed at

improving access of MSME to market, finance and technology
upgradation by enhancing the outreach of existing MoMSME schemes.
• The programme also aims at strengthening institutions at the Central and
State level, and enhancing Centre- State collaboration.
• The total project cost of RAMP, for the five years FY 2022-23 to 2026-27 is
Rs. 6062.45 Cr, of which, World Bank support is Rs.3750 Cr (USD 500
million).
• Objective of RAMP
• Accelerating Centre- State collaboration in MSME promotion and
development
• Enhancing effectiveness of existing MoMSME schemes for technology
upgradation
• Strengthening Receivable Financing Market for MSME
• Enhancing effectiveness of Credit Guarantee Trust for Micro & Small
• Enterprises (CGTMSE), and promoting guarantee for greening initiatives
of MSE, and women owned MSE
• Reducing incidence of delayed payments to MSE.
• Target Beneficiaries: RAMP scheme envisages to benefit more than 5.5
lakh MSME during the programme period (FY 2022-23 to 2026-27).
• The programme implementation will be through the State agencies.
• Fund Allocation:
• BE 2022-23: Rs.723.00 Cr, RE 2022-23: Rs. 495.00 Cr
• BE 2023-24: Rs.1170 Cr, RE 2023-24: Rs.1320.7903 Cr
 Achievements
• 35 States/ UT have evinced interest in participating in the RAMP Scheme by
signing Letters of Undertaking (LoU) with the M/o MSME.
• 33 States/UT have been provided a grant of Rs.5 crore each, for preparing a
Strategic Investment Plan (SIP), which will be a roadmap for development
and promotion of the MSME sector in the respective State/UT.
• Strategic Investment Plans (SIP) have been received from 25 States/UT. A
total grant of Rs.2489.9 Cr has been approved for selected project proposals in
the SIPs of these 25 States/UT.
• The first instalment of grants has been released to States/UTs for
implementation of approved projects.
• The Ministry has achieved a completion of 34% of the mandated targets and
has claimed an amount of USD 172 Mn from the World Bank out of the total
loan component of USD 500 Mn.
 Government of Karantaka - MSMEs Schemes
• Investment Promotion Subsidy for Micro & Small Enterprises
• Investment Promotion Subsidy for Medium Enterprises
• Exemption from Stamp Duty for MSMEs
• Concessional Registration Charges for MSMEs
• Reimbursement of Land Conversion Fee for MSMEs
• Exemption from Tax on Electricity Tariff for MSMEs
• Power Subsidy for Micro and Small enterprises
• Support Artisans - Working capital, tools, and machineries
• Interest Subsidy on Technology Up-gradation Loan
• Technology Adoption
• Technology Business Incubation Centre (TBIC)
• Incentives of Quality Certification
• Rainwater Harvesting - Sustainability and Responsible Industrialization
• Wastewater Recycling - Sustainability and Responsible Industrialization
• Reimbursement of Expenses Incurred for Water Audit
• Land Subsidy
• Subsidy on water charges…… etc.,
• (For more and Detailed information, Refer - Government of Karnataka
Industrial Policy 2020-2025)
Thank You