The Government of India has taken several steps to promote ease of doing business for Micro, Small and Medium Enterprises (MSMEs) and create a conducive ecosystem for their growth and expansion, the Lok Sabha was informed on Thursday.
In a written reply, Minister of State for Micro, Small, and Medium Enterprises Shobha Karandlaje said that the revised criteria for classification of MSMEs, first adopted in 2020, have been further updated with effect from April 1, 2025.
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The revision aims to support upward mobility in technology, skilling, and business growth, while encouraging the transformation and expansion of MSMEs.
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To simplify registration and compliance, the Udyam Registration Portal was launched on July 1, 2020.
Retail and wholesale traders were also brought under the MSME ambit with effect from July 2, 2021.
Additionally, non-tax benefits have been extended for a period of three years in cases where enterprises undergo an upward change in MSME status.
Highlighting efforts to formalise the informal sector, the Minister noted that the Udyam Assist Platform was launched on January 11, 2023, to bring informal micro enterprises into the formal framework and enable them to access benefits under Priority Sector Lending.
The Government has also operationalised the Self Reliant India (SRI) Fund to provide equity support to MSMEs.
Under the Credit Guarantee Scheme for Micro and Small Enterprises (CGS), collateral-free loans are being supported through guarantees to lending institutions.
An additional Rs 9,000 crore was infused into the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), as announced in the Union Budget 2023–24, to facilitate additional credit of Rs 2 lakh crore at a reduced cost.
Referring to pandemic-related relief, the Minister said that the Rs 5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) remained operational until March 31, 2023.
Citing a State Bank of India research report dated January 23, 2023, she stated that around 14.6 lakh MSME accounts, about 98.3 per cent belonging to micro and small enterprises, were saved from turning into non-performing assets due to the scheme.
To further support MSMEs in the post-COVID period, the Vivad se Vishwas I – Relief for MSMEs (VsV-I) scheme was launched on April 11, 2023, by the Department of Expenditure.
Under this scheme, 95 per cent of deducted performance security, bid security and liquidated damages for government contracts during the COVID-19 period were refunded.
Relief was also extended to MSMEs debarred for defaults, and delivery periods for all contracts, including PPP projects, were extended by three to six months without penalty. More than 60,000 MSME claims were finalised under the scheme.
On public procurement, the Minister said that several initiatives have been undertaken to ensure effective implementation of the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012.
The MSME-SAMBANDH Portal, launched on December 8, 2017, is being used to monitor procurement by central ministries, departments and CPSEs.
She added that the Ministry of MSME is working closely with the Department of Public Enterprises and regularly engages with CPSEs to achieve procurement targets. The Government e-Marketplace (GeM) is being extensively used for procurement, with special focus on supporting SC/ST and women entrepreneurs.
Vendor Development Programmes under the Procurement and Marketing Support Scheme are also being organised to facilitate networking between MSEs and CPSEs, including special buyer-seller meets for SC/ST and women-owned enterprises.
In addition, the Special Credit Linked Capital Subsidy Scheme under the National SC-ST Hub promotes new enterprises by aspiring SC/ST entrepreneurs and enhances their participation in public procurement.
The Minister said these measures reflect the government’s sustained efforts to strengthen the MSME sector and position it as a key driver of economic growth and employment generation.
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