5 MSME Schemes for Nation Development

Birender Singh

Birender Singh

MSME Sector plays a critical role in any economy’s industrial development, as seen in the historical records of presently developed countries. These units act as ancillary units and provide processed raw material to advanced industrial units. Thus the quality of final products of advanced industrial units, to a large extent, depends on the material supplied by MSME units. In addition, these units provide unskilled and semi-skilled labor to these advanced industrial units. Several MSMEs also directly produce and deliver final products to consumers also. Suppose these MSMEs receive continuous demand orders from domestic and export markets. In that case, it may give such a platform to them that many of them by, stepping up to improve their status as advanced industrial units. And thus take the economy on the path of industrial development. 

Thus, one of the critical indicators to assess the successful development of the MSME Sector in an economy is the data on the opening of new MSMEs. It depicts the conducive environment for opening and growth of such units in an economy and shows the high morale of entrepreneurs in the macroeconomics of the economy. Here, we showcase 5 MSME schemes and how it helps in the nation’s development.

Here, let us see some of the Top schemes every MSME in India should know.

Rs 20,000 crores Subordinate Debt for Stressed MSMEs

Objective: Subordinate debt will substantially help sustain and revive the MSMEs that have either become NPA or are on the brink of becoming NPA. Promoters may infuse this amount into MSME units as equity, thereby enhancing liquidity and maintaining the debt-equity ratio. When an outright loan is difficult, sub-debt with a guarantee will provide the requisite financing to the MEME units. 

The nature of assistance is awesome. Promoters of the MSMEs will be given credit equal to 15% of their stake (equity plus debt) or Rs. 75 lakh, whichever is lower. The maximum tenure for repayment will be ten years, and there will be a moratorium of 7 years on the payment of principal. 90% guarantee coverage would come from the scheme or trust, and the remaining 10% from the concerned promoter.

This scheme seeks to extend support to the promoters of the operational MSMEs, which are stressed and have become NPA as of 30th April 2020. 

MSMEs meeting the eligibility criteria may approach eligible banks. Guidelines for these schemes can also be downloaded from,




Entrepreneurship and Skill Development Programme (ESDP)

Objective: To motivate young persons representing different sections of the society, including SC/ST women, Physically Handicapped, Ex-servicemen, and below poverty line (BPL) persons, to consider self-employment or entrepreneurship as one of the career options. To promote new enterprises, build existing MSMEs capacity, and inculcate entrepreneurial culture in the country. 

Entrepreneurship & Skill Training in Agro Based Products, Hosiery, Food & Fruit Processing Industries, Carpet Weaving, Mechanical Engineering Workshop/ Machine Shop, Heat Treatment, Electroplating, Basic/Advance Welding/ Fabrication/Sheet metal work, Basic/ Advance Carpentry, Glass & Ceramics, etc. is given. 

Aspiring and existing entrepreneurs eligible to apply can apply through MSME-DI and MSME-TC Websites. Guidelines for these schemes can be downloaded from  https://msmedi.dcmsme.gov.in/

Scheme of Fund for Regeneration of Traditional Industries

Objective: To organize the traditional industries and artisans into clusters to make them competitive and support their long-term sustainability.

Non-Government Organizations (NGOs), institutions of the Central and State Governments and semi Government institutions, field functionaries of State and Central Govt., and Panchayati Raj Institutions(PRIs) with suitable expertise to undertake cluster development – are eligible for this. Private sector/corporate entities can also take up projects directly by forming cluster-specific SPVs.

Corporate and Corporate Social Responsibility (CSR) foundations with expertise in cluster development are also encouraged to participate as implementing agencies. 

The eligible agency/organization has to submit the proposal through the SFURTI portal to any of the designated Nodal Agencies under the scheme for onward submission to the Ministry and Scheme Steering Committee for approval.

Guidelines of this scheme can be downloaded from,


The application can be submitted at – https://sfurti.msme.gov.in/SFURTI/SfLogin.aspx

A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) 

Objective: To set up a network of Livelihood Business Incubators (LBIs) and Technology Business Incubators (TBIs) to create jobs and reduce unemployment by promoting the culture of entrepreneurship and innovation in the Agro rural sector.

National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC), Coir Board, or any other GOI/State Govt institution can set up LBI. Not only that, Private Partner Institutions and entities can also set up LBIs under PPP mode with the institutions described above. The eligibility parameters are more. 

The existing incubator should have adequate expertise/infrastructure to support incubation activity for promoting innovation. Both LBIs and TBIs can get One Time Grant as well.

Guidelines of ASPIRE scheme are available at  https://aspire.msme.gov.in/ASPIRE/Home.aspx

Assistance to Training Institutions (ATI) Scheme  

Objective: To create and strengthen infrastructure and assistance for entrepreneurship and skill development training programs.

The support for skill development programs by training institutions of the Ministry of MSME. This scheme applies only to training institutions of the Ministry of MSME and State level EDIs. The key benefits of this scheme are the support for infrastructure and capacity building of training institutions of the Ministry of MSME and existing State level EDIs.

For detailed guidelines, you shall visit,


The Indian Government has already taken many steps, including giving many incentives and subsidies to encourage youth to opt for business as another career option which would be a better/stable career option compared to doing jobs for others. Several schemes, assistance, and many benefits are being provided to entrepreneurs through different ministries. This is our effort to consolidate major MSME-related schemes in this story.

The Schemes and support from the Government of India to the MSME sector undoubtedly, show the way to success for Entrepreneurs.