Micro Small and Medium Enterprises play a critical role in India’s economy. To support their growth, the Government of India has introduced a wide range of MSME schemes that focus on finance, credit access, technology, quality improvement, exports, skill development, and entrepreneurship.
This page explains all major MSME schemes in simple language so that business owners, first time entrepreneurs, manufacturers, service providers, and exporters can clearly understand what support is available and how it helps.
What Are MSME Schemes?
MSME schemes are government support programs created to reduce business risk, improve access to credit, promote formalisation, and help small businesses grow in a structured way.
These schemes are designed to support MSMEs during:
- Business setup
- Expansion and working capital needs
- Technology and machinery upgrades
- Quality certification
- Export growth
- Skill development and employment generation
Most schemes are implemented through banks, NBFCs, MSME offices, and government portals.
Why MSME Schemes Matter for Small Businesses
Many MSMEs face similar challenges; limited capital; high loan interest; lack of collateral; outdated machinery; and difficulty in accessing global markets.
MSME schemes aim to:
- Reduce loan dependency through subsidies and guarantees
- Encourage formal banking and registration
- Improve productivity and competitiveness
- Support employment generation
- Promote inclusive entrepreneurship
When used correctly, these schemes can significantly improve business stability and long term growth.
Broad Categories of MSME Schemes
Based on the MSME scheme booklet, government schemes can be grouped into the following major categories.
1. Credit and Finance Support Schemes
Prime Minister’s Employment Generation Programme PMEGP
PMEGP scheme is designed to support new micro enterprises by providing a subsidy on bank loans. The scheme promotes self employment in both rural and urban areas.
It is mainly useful for individuals who want to start a manufacturing or service business with limited capital.
Credit Guarantee Scheme CGTMSE
CGTMSE scheme allows MSMEs to get collateral free loans. The government provides a guarantee cover to banks which reduces the lender’s risk.
It is useful for businesses that have strong potential but cannot provide property or asset security.
MUDRA Loan Scheme
MUDRA loans support micro and small businesses by offering loans under three categories based on business stage and requirement.
It is commonly used by traders, shop owners, service providers, and small manufacturers.
Interest Subvention Schemes
Interest subvention schemes reduce the effective interest cost on MSME loans. A portion of the interest paid is reimbursed or adjusted.
These schemes help businesses manage cash flow and reduce borrowing pressure.
2. Subsidy and Capital Support Schemes
Credit Linked Capital Subsidy Scheme CLCSS
CLCSS scheme supports MSMEs in upgrading machinery and technology by providing a subsidy on eligible capital investment.
It is mainly applicable to manufacturing units looking to improve efficiency and output quality.
MSME Competitive Technology Scheme
This scheme supports adoption of modern technology; lean manufacturing practices; and energy efficient systems.
It helps MSMEs reduce production cost and improve competitiveness.
3. Entrepreneurship and Startup Schemes
Stand Up India Scheme
Stand Up India scheme promotes entrepreneurship among women and SC ST entrepreneurs by facilitating bank loans for new enterprises.
It focuses on inclusive growth by improving access to formal credit.
Startup India Initiative
Startup India supports innovation driven businesses through tax benefits; regulatory ease; funding access; and faster compliance.
It is suitable for startups with scalable business models rather than traditional small businesses.
4. Quality and Certification Schemes
ZED Certification Scheme
The ZED scheme focuses on product quality and environmental responsibility.
MSMEs are encouraged to adopt better manufacturing practices which improve market credibility and customer trust.
ISO and Quality Certification Support
Under this scheme, MSMEs receive financial assistance for obtaining quality certifications.
This improves acceptance in domestic and international markets.
5. Export Promotion Schemes for MSMEs
Export Promotion Capital Goods EPCG Scheme
EPCG allows MSMEs to import capital goods at reduced or zero customs duty against export obligations.
It supports exporters who want to modernise production without heavy upfront cost.
Market Access Initiative and Market Development Assistance
These schemes support MSMEs in participating in international trade fairs; buyer seller meets; and export promotion events.
They help MSMEs explore global markets with lower financial burden.
6. Skill Development and Employment Schemes
Entrepreneurship and Skill Development Programme ESDP
This scheme focuses on improving entrepreneurial and managerial skills among MSMEs.
It is useful for first time entrepreneurs and small business owners.
Technology Centres and Tool Rooms
MSME technology centres provide training; testing; and design support.
They help MSMEs improve technical capabilities and workforce skill levels.
7. Udyam Registration Linked Benefits
Udyam Registration is the foundation for accessing MSME schemes.
Once registered, businesses become eligible for:
- Priority sector lending
- Subsidies and guarantees
- Protection against delayed payments
- Participation in government programs
Without Udyam registration, most MSME scheme benefits are not accessible.
MSME Schemes in India – Quick Overview Table
| MSME Scheme Name | Focus Area | Who It Is For | Type of Support |
|---|---|---|---|
| Prime Minister’s Employment Generation Programme (PMEGP) | New enterprise setup | First time entrepreneurs; micro businesses | Loan with subsidy |
| Second Loan for PMEGP and MUDRA Units | Business expansion | Existing PMEGP and MUDRA units | Subsidy on expansion loan |
| Credit Guarantee Scheme (CGTMSE) | Credit access | Registered MSMEs without collateral | Collateral free loan guarantee |
| Micro and Small Enterprises Cluster Development Programme (MSE CDP) | Infrastructure and clusters | MSME clusters; SPVs | Infrastructure and common facility support |
| Scheme of Fund for Regeneration of Traditional Industries (SFURTI) | Traditional industries | Artisans; traditional MSMEs | Cluster funding and market support |
| Entrepreneurship and Skill Development Programme (ESDP) | Skill development | Aspiring and existing entrepreneurs | Training and skill programs |
| Assistance to Training Institutions (ATI) | Training infrastructure | MSME training institutions | Infrastructure grant |
| Coir Vikas Yojana | Sector specific development | Coir industry MSMEs | Technology; skill; market support |
| Procurement and Marketing Support (PMS) Scheme | Market access | Manufacturing and service MSMEs | Trade fairs; branding; e commerce support |
| International Cooperation (IC) Scheme | Export promotion | Export oriented MSMEs | International exposure and reimbursement |
| National SC ST Hub Scheme | Inclusive entrepreneurship | SC and ST entrepreneurs | Subsidy; mentoring; market access |
| ASPIRE Scheme | Innovation and incubation | Rural and agro based enterprises | Incubation and skill support |
| Khadi Gramodyog Vikas Yojana | Khadi and village industries | Khadi institutions and artisans | Subsidy; interest support; infrastructure |
| Promotion of MSMEs in NER and Sikkim | Regional development | MSMEs in NER and Sikkim | Infrastructure and cluster support |
| PM Vishwakarma Scheme | Artisans and craftspeople | Traditional artisans | Skill; tools; credit support |
| Tool Rooms and Technical Institutions Scheme | Technology and training | Manufacturing MSMEs | Tooling; training; consultancy |
| MSME Champions Scheme | Competitiveness and quality | Registered MSMEs | ZED; Lean; innovation support |
| MSME Sustainable (ZED) Certification | Quality and environment | Manufacturing MSMEs | Certification subsidy and incentives |
| MSME Innovative Scheme | Innovation and IPR | MSMEs; startups; students | Incubation; design; IP support |
| MSME Competitive (Lean) Scheme | Productivity improvement | Manufacturing MSMEs | Lean implementation support |
| Self Reliant India (SRI) Fund | Growth capital | High growth MSMEs | Equity and quasi equity funding |
| Raising and Accelerating MSME Performance (RAMP) | Market; finance; technology | MSMEs through state agencies | Policy and performance support |
How to Choose the Right MSME Scheme
Before applying, MSMEs should ask:
- Is the business new or existing
- Is the requirement related to loan; subsidy; technology; or export
- Is Udyam registration completed
- Is the business manufacturing; services; or trading
Choosing the right scheme improves approval chances and avoids delays.
Common Mistakes MSMEs Make
Some frequent issues include:
- Applying without proper documentation
- Choosing schemes without understanding eligibility
- Mixing personal and business finances
- Expecting subsidies to replace business viability
Correct planning and awareness can prevent these mistakes.
Frequently Asked Questions on MSME Schemes in India
Q. What are MSME schemes in India?
A. MSME schemes are government programs created to support micro, small, and medium enterprises through financial assistance, credit support, subsidies, skill development, technology upgrades, and market access.
Q. Who can apply for MSME government schemes?
A. Any business or individual that qualifies as a micro, small, or medium enterprise and meets the eligibility criteria of a specific scheme can apply. In most cases, Udyam registration is required.
Q. Is Udyam registration mandatory for MSME schemes?
A. Yes, Udyam registration is mandatory for most MSME schemes. It acts as the base registration that allows businesses to access loans, subsidies, guarantees, and other government benefits.
Q. Can one MSME apply for multiple schemes?
A. Yes, an MSME can apply for multiple schemes as long as it meets the eligibility conditions of each scheme and the benefits do not overlap for the same purpose.
Q. Which MSME scheme is best for new businesses?
A. PMEGP and MUDRA schemes are commonly used for new businesses. PMEGP supports enterprise setup with subsidy, while MUDRA focuses on small business loans.
Q. Which MSME scheme provides collateral free loans?
A. The Credit Guarantee Scheme under CGTMSE enables MSMEs to get loans without providing collateral by offering a guarantee cover to banks and financial institutions.
Q. Are MSME schemes available for service based businesses?
A. Yes, many MSME schemes apply to service based businesses, including MUDRA loans, CGTMSE, interest subvention schemes, and skill development programs.
Q. Are there MSME schemes for women entrepreneurs?
A. Yes, schemes such as Stand Up India, PMEGP special category benefits, and women focused incentives under ZED and other programs support women entrepreneurs.
Q. Which MSME schemes support technology and machinery upgrades?
A. CLCSS, MSME Champions Scheme, MSME Competitive Lean Scheme, and Tool Rooms and Technical Institutions Scheme support technology adoption and machinery upgrades.
Q. Are there MSME schemes for exporters?
A. Yes, schemes like EPCG, International Cooperation Scheme, Market Development Assistance, and export related support under MSME Champions help MSMEs expand into global markets.
Q. Do MSME schemes offer interest subsidies?
A. Yes, interest subvention schemes reduce the effective interest burden on MSME loans by offering partial reimbursement or reduced interest rates.
Q. How can MSMEs apply for government schemes?
A. Most MSME schemes are applied through government portals, banks, or implementing agencies. The application process usually involves online registration, document submission, and bank level verification.
Q. What documents are generally required for MSME schemes?
A. Common documents include Udyam registration certificate, Aadhaar, PAN, business details, bank statements, project reports, and loan related documents depending on the scheme.
Q. Are MSME schemes available for existing businesses?
A. Yes, many schemes such as CGTMSE, interest subvention, technology upgradation, and export promotion are designed specifically for existing MSMEs.
Q. Are MSME schemes available for existing businesses?
A. Yes, many schemes such as CGTMSE, interest subvention, technology upgradation, and export promotion are designed specifically for existing MSMEs.
Q. What is the MSME Champions Scheme?
A. The MSME Champions Scheme brings together quality improvement, innovation, lean manufacturing, and digital initiatives to improve competitiveness and sustainability of MSMEs.
Q. How do MSME schemes help small businesses in the long term?
A. MSME schemes help businesses reduce financial risk, improve productivity, access formal credit, upgrade technology, and expand markets, leading to stable and long term growth.
GSCE Insight
Many MSMEs lose scheme benefits not because they are ineligible; but because they lack clarity on application flow and documentation. Understanding the intent of a scheme is more important than memorising scheme names.
Follow GSCE MSME Schemes for more insights about MSME Schemes.
Dalip Singh is an SEO specialist, SEO content writer, and MSME scheme strategist with experience in building search focused content across business, finance, and government schemes. He specializes in MSME schemes, technical SEO, and intent driven content that improves organic visibility while delivering accurate and actionable insights for entrepreneurs and professionals.