MSME Ministry Rolls Out Major Reforms to Strengthen Sector

The Ministry of Micro, Small and Medium Enterprises (MSME) has launched a suite of measures to reinforce the sector’s formalisation, credit access, and timely payments. These reforms are aimed at supporting MSMEs through digital platforms, financial support schemes, and targeted programmes for artisans.

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Digital Platforms for Recognition and Inclusion

Expanded digital registration has emerged as a foundation of reform. Since July 1, 2020, MSMEs have been able to register through the Udyam portal, with over 6.63 crore enterprises now onboarded. To further formalise informal micro-enterprises, the Udyam Assist Platform (UAP) was introduced, helping businesses gain eligibility for Priority Sector Lending (PSL).

Enhanced Credit Access and Funding

Financial support has been significantly bolstered. The revamped Credit Guarantee Scheme, backed by a ₹9,000 crore infusion, now enables collateral-free loans up to ₹10 crore, with 90% guarantee coverage via the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

In addition, the government has set up a ₹50,000 crore Self-Reliant India (SRI) Fund to infuse equity into high-potential MSMEs aimed at scaling into larger enterprises.

Schemes Supporting Artisans and Entrepreneurs

Support extends beyond financing. Under the PM Vishwakarma Scheme, launched in September 2023, artisans across 18 traditional trades receive comprehensive support—including skill development and financial aid.

Moreover, the Prime Minister’s Employment Generation Programme (PMEGP) has raised its project cost limit to ₹50 lakh for manufacturing ventures and ₹20 lakh for service enterprises—broadening access for entrepreneurs.

Addressing Payment Delays and Liquidity

To tackle delayed receivables, digital tools have been introduced. The Trade Receivables Discounting System (TReDS) connects MSMEs, buyers, and financiers to streamline invoice financing. Under this system, MSMEs can sell invoices to access working capital promptly.

Conclusion

The Ministry's reforms represent a strong push for MSMEs all around India to become more formalised, financially included, and digitally enabled. A more encouraging and accessible ecosystem may help businesses in some ways, from speeding up registrations and providing bigger loan guarantees to artisan-focused programs and payment options.