The Government of India has rolled out multiple initiatives aimed at improving financial accessibility, ensuring timely payments, and accelerating technology adoption among Micro, Small, and Medium Enterprises (MSMEs). These measures are intended to enhance ease of doing business and strengthen the MSME sector’s contribution to the economy.
Improved Credit Access and Financial Support
To expand credit availability, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been bolstered with an infusion of ₹9,000 crore (US$ 1.08 billion). This enhancement increases guaranteed credit availability to ₹2 lakh crore (US$ 24.1 billion), raises the guarantee ceiling to ₹10 crore, and offers coverage of up to 90%.
In addition, entrepreneurship development continues under the Prime Minister’s Employment Generation Programme (PMEGP), which provides margin money subsidies of up to 35% for establishing new microenterprises. The scheme supports project costs of ₹50 lakh in manufacturing and ₹20 lakh in services.
Equity Funding and Investor Support
Equity access for MSMEs has been strengthened through the Self-Reliant India (SRI) Fund, totalling ₹50,000 crore (US$ 6.02 billion), including ₹10,000 crore (US$ 1.2 billion) contributed by the government. This fund helps MSMEs scale operations and integrate into global value chains.
Ensuring Timely Payments and Faster Receivable Processing
To protect MSMEs against delayed payments, the government is leveraging multiple digital and regulatory platforms:
- SAMADHAAN Portal & MSE Facilitation Councils: Facilitate grievance resolution and payment tracking
- Online Dispute Resolution (ODR): Enables fully digital case arbitration
- Trade Receivables Discounting System (TReDS): Now mandatory for companies with turnover above ₹250 crore to accelerate receivables and strengthen working capital cycles
Summary
The Government of India has introduced several reforms to strengthen MSME financing, ensure timely payments, and drive technology adoption. Key measures include enhanced CGTMSE credit guarantees, equity support through the SRI Fund, entrepreneurship subsidies under PMEGP, and enforcement of digital platforms like SAMADHAAN, ODR, and TReDS to streamline payments and dispute resolution. These efforts aim to improve financial stability and operational efficiency across the MSME sector.
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