Why MSME and Other Schemes Got Famous in India?

Micro, Small & Medium Enterprises, MSME full form, formulate one of the significant employment-generating sectors of the country. To elaborate, in recent years, MSMEs account for almost 45% of industrial-oriented employment in India. Additionally, it has made a significant impact on the country’s exports as well. As a result, both the government and financial institutions have extended several schemes to promote the growth and overall productivity of MSMEs. Regardless, small and mid-scale business owners must find out about the different schemes that are crafted, especially to benefit them.

Popular schemes under MSME

Here’s a list of popular Micro, Small & Medium Enterprises (MSME full form) schemes –

Prime Minister’s Employment Generation Programme (PMEGP)

The said credit-linked subsidy scheme is implemented by KVIC or Khadi and Village Industries Commission at the national level. This scheme aims to encourage unemployed youth to become self-employed by establishing micro-enterprises in any non-farm sector. In turn, it would help them tackle the financial challenges that most small business owners face.

Under PMEGP, eligible applicants belonging to the general category in rural areas would avail up to 25% of the project’s cost as subsidy. Likewise, those in the urban area would avail up to 15% as subsidy.

Alternatively, eligible applicants belonging to the special category (SC/ST/OBC and other minorities/women, ex-servicemen, physically handicapped, etc.) would avail up to 35% and 25% of the project’s cost as subsidy in rural and urban areas respectively.

Individuals who would fulfil these following criteria would be able to benefit from this scheme –

  • Individuals above the age of 18 years and passed at least class 8.
  • Charitable trusts.
  • Self-help groups.
  • Production-oriented co-operative societies.

Notably, there is no upper-income limit to set up a project. However, industrial units that are already a beneficiary of a government scheme would be deemed ineligible under PMEGP.

Standup India

This scheme was launched by the government to promote entrepreneurial skills among women, scheduled caste and scheduled tribes. Under this scheme, a credit amount between Rs.10 lakh and Rs.1 crore is provided to eligible applicants.

Each designated financial institutions can approve a loan application of at least one woman and at least one SC or ST applicant to set up a Greenfield enterprise in manufacturing, trading and service sector.

Those, fulfilling these following criteria would be considered eligible under the Standup India scheme –

  • Applicants should be above 18 years of age.
  • Should be an SC/ST and/or a woman.
  • Should possess a clean credit history with zero default.

In must be noted that at least 51% of total shareholding and stake of a non-individual enterprise should be held by SC/SC and/or women.

In case small and mid-scale business owners do not meet the eligibility criteria of the Standup India scheme, they may look for alternative financing options. For instance, they can avail a small business loan from financial institutions like Bajaj Finserv at a competitive rate of interest.

Also, the NBFC extends pre-approved offers on different financial products like personal loans, business loans, etc. Such offers directly make the process of availing financial assistance more convenient.

Subsequently, entrepreneurs should find out the information they need to apply for a business loan to streamline the process accordingly.

Entrepreneurship Skill Development Programme (ESDP)

The said programme was launched to encourage the youth to become self-employed. Women, SC, ST, BPL, differently-abled, etc. benefit the most under the ESDP scheme. As per the programme’s guidelines, there should be at least 40% women participation.

The programme is designed to promote the growth of new enterprises and to improve the efficiency of existing MSMEs. Besides vocational training, the programme also offers industrial motivation campaign, management development programme, entrepreneurship-cum-skill development programme, and entrepreneurship awareness programmes.

These schemes target Micro, Small & Medium Enterprises (MSME full form) and help these to expand. Notably, individuals should check the eligibility criteria and associated terms and conditions to make the most of such schemes.

Conclusion

Micro, Small & Medium Enterprises, MSME full form, are among the vital employment-generating sectors of the country. MSMEs have been responsible to create around 45% of employment in the industrial sector of India. Also, the fact it has had a substantial impact on India’s export has encouraged the government and finance to institutions formulate schemes to promote their development.

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