The Roadmap to Success: A Guide to Leveraging Government Schemes for MSMEs

In the words of our current Minister of Commerce and Industry, Shri Piyush Goyal - "MSMEs are the backbone of economies, driving innovation, creating jobs and significantly contributing to overall economic growth".

MSMEs contribute to approximately 30% of the country’s Gross Domestic Product (GDP), and 45% of the manufacturing output, and employ about 11 crore people in India. In an effort to enable the MSME sector, the Indian Government has introduced a variety of schemes to support the MSMEs in their journey to growth and expansion.

Are you a small business owner? Here are some of the government schemes that can help accelerate your business:

1. Prime Minister Employment Generation Programme (PMEGP): Under this scheme, the government provides employment opportunities to unemployed youth and traditional artisans in rural and urban areas. The scheme aims to help MSME owners by bridging the gap between their labor requirements.

The key benefits of this scheme are as follows:

• • Through this bank-financed subsidy program, new micro-enterprises can be set up in the non-farm sector.
  • Margin money subsidy ranges from 15-35% of the total project cost sum up to INR 50 Lakh in the manufacturing sector and INR 20 Lakh in the service sector.
  • For beneficiaries belonging to Special categories such as SC/ST/ Women/ Minorities/ Ex-Servicemen/ Transgenders/ Aspirational districts/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas.

This scheme applies to any individual above the age of 18 years old.

2. Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE): This scheme aims to encourage first-generation entrepreneurs to start their own businesses under the MSME sector by providing credit guarantee support to Micro and Small enterprises (MSEs) through the elimination of third-party guarantee-free loans.

The key benefits of this scheme are as follows:

• • Credit guarantee for loans up to INR 2 crore without third-party guarantee.
  • The guaranteed coverage ranges from 85% (Micro Enterprise up to INR 5 Lakh) to 75% (others).
  • 50% coverage is for retail activity.

This scheme applies to existing and aspiring MSME business owners.

Seeking MSME certification for your business? This concise guide addresses all queries and facilitates the certification process. Register your business and get an MSME certificate to explore eligibility, complete online registration, avail benefits of government support, and streamline the process for growth and opportunities.

3. Micro and Small Enterprise Cluster Development Programme (MSE-DCP) Scheme: The scheme ensures the growth of micro and small enterprises (MSEs) by dealing with common issues such as improvement of technology, skills, market access, and more. It facilitates businesses with the necessary means to upgrade infrastructural facilities in the new/existing Industrial areas/clusters of MSEs. It also helps set up common facility centers (for testing, training, raw material depot, effluent treatment, complementing production processes, and more). It further promotes eco-friendly manufacturing technology for the clusters.

The key benefits of the scheme are as follows:

• • Creation of common facility centers including plug-and-play facilities.
  • Support for infrastructure development projects including flatted factory complexes.
  • The scheme is applicable for existing entrepreneurs (in the form of Special Purpose Vehicles - SPVs).
• Entrepreneurship and Skill Development Programme (ESDP) Scheme: The scheme aims to promote new enterprises, improve the abilities of existing MSMEs, and promote the business spirit in the country.

The key benefit of this scheme is to increase the number of MSME owners through development, achievement, motivation, and business skills in different sections of society.

This scheme applies to existing and aspiring MSME business owners.

Godrej Nirmaan

In alignment with the vision of the Government of India, Godrej launched Nirmaan as a business solution aimed at supporting MSMEs beyond financing. Backed by exclusive partnerships, one of the distinguishing features of Nirmaan is its emphasis on providing value-added services to the MSMEs through its carefully curated selection of partner offerings at special discounted rates.

Nirmaan serves as an all-encompassing and robust business solution, specifically designed to empower and nurture the growth of MSMEs. With its expanded partner network, Nirmaan serves as the optimal catalyst for seizing business opportunities. To learn more about Nirmaan's partnerships and offerings, click here.

To know more about the schemes especially introduced by the Government of India to enable MSMEs and help them grow, please refer to pages 5 to 50 of the report issued by the Ministry of Micro, Small, and Medium Enterprises here.

Disclaimer: Godrej & its Affiliates are facilitators of the products & services displayed on the Platform. The Companies shall not be liable for any product features, or services. The User is advised to avail services at its discretion. For more details, visit www.godrejnirmaan.com

The contents of this article are for information purposes only & not a financial advisory. For more details, please refer to the product or service document and/ or connect with our customer representative prior to making any financial decision. The information is subject to update, completion, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
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