Running a small business in India comes with its share of financial and operational challenges, and the government has introduced various schemes to address them. From collateral-free credit and employment generation to skill training, market access and technology upgradation, these schemes cover a wide range of business needs.
Understanding the key schemes available, their eligibility conditions and application process helps Micro, Small and Medium Enterprises (MSMEs) reduce their financial burden, access growth capital and build a stronger foundation for long-term operations.
Which government schemes are available for MSMEs in India?
The following are some of the key schemes for 2025-26 implemented by the Ministry of MSMEs and its organisations across credit support, skill development, technology upgradation and market access.
Prime Minister’s Employment Generation Programme (PMEGP)
This is a credit-backed subsidy programme for setting up new micro-enterprises in the non-farm sector. Margin money subsidy varies from 15% to 35% of project cost up to ₹50 lakh for manufacturing and ₹20 lakh for services. Special categories receive 35% subsidy in rural and 25% in urban areas. Banks finance 90 to 95% of the remaining project cost.
Who can apply:
- Any individual aged 18 years or above.
- Scheduled Castes (SC)/ Scheduled Tribes (ST), women, minorities, ex-servicemen and transgenders qualify for higher subsidy rates.
Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)
This scheme helps Micro and Small Enterprises (MSEs) obtain collateral-free loans with guarantee coverage up to ₹10 crore per borrower per lending institution.
Guarantee coverage varies by borrower category: up to 90% for women-owned MSEs, up to 85% for micro enterprises (loans up to ₹5 lakh), SC/ST borrowers, and ZED-certified units, and 75% for other eligible borrowers. MSEs in RBI-identified Credit Deficient Districts receive an additional 5% coverage above the applicable rate. Exact percentages are subject to the latest CGTMSE circular at cgtmse.in.
MSEs in Credit Deficient Districts receive an additional 5% coverage.
Who can apply:
- New and existing MSEs registered on the Udyam portal.
- Service enterprises, trading units and educational institutions are also eligible.
Micro and Small Enterprises Cluster Development Programme (MSE-CDP)
It supports MSEs through Common Facility Centres and infrastructure upgradation. Government assistance is up to 80% of project cost, capped at ₹30 crore for Common Facility Centres and up to 70% capped at ₹15 crore for industrial infrastructure such as roads, drainage and power distribution.
Who can apply:
- Existing entrepreneurs organised as special purpose vehicles.
- State government organisations and industry associations facilitating cluster development.
Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
This organises traditional industry artisans into collectives to improve competitiveness. Government support is up to ₹2.5 crore for clusters of up to 500 artisans and ₹5 crore for larger ones. Soft interventions including skill development, design support and e-commerce integration are funded up to ₹25 lakh.
Who can apply:
- Artisans from handicrafts, textiles, agro-processing, bamboo, honey, coir and khadi sectors.
- Applications are submitted by implementing agencies such as non-governmental organisations (NGOs) and government organisations on behalf of artisans.
Entrepreneurship and Skill Development Programme (ESDP)
It provides structured training to aspiring and existing entrepreneurs through one-day awareness programmes, six-week skill development courses and one-week management development programmes. Advanced sessions are conducted through Indian Institutes of Management (IIMs), Indian Institutes of Technology (IITs) and National Institutes of Technology (NITs) covering digital marketing, export management and quality management.
Who can apply:
- Aspiring and existing entrepreneurs across all sectors.
- SC/ST, women, differently-abled, ex-servicemen and Below Poverty Line (BPL) individuals are specifically targeted.
Procurement and Marketing Support (PMS) Scheme
This scheme helps MSMEs access domestic and international markets through trade fairs, exhibitions and MSME expos. It also supports adoption of modern packaging, bar coding and e-commerce platforms and funds development of retail outlets for geographical indication products and vendor development programmes.
Who can apply:
- Manufacturing and service sector MSEs with a valid Udyam Registration Certificate.
International Cooperation (IC) Scheme
It funds MSME participation in international exhibitions, trade fairs and buyer-seller meets abroad. It also reimburses stall charges up to ₹3 lakh, airfare up to ₹1.5 lakh and freight charges up to ₹50,000 per unit. First-time exporters can claim reimbursement of registration fees, export insurance premiums and quality certification costs.
Who can apply:
- MSMEs, government organisations and registered industry associations under Sub-Component I.
- First-time MSE exporters under Sub-Component II.
PM Vishwakarma Scheme
This scheme supports artisans across 18 traditional trades with recognition, training, tools and credit. Benefits include a stipend of ₹500 per day during training, toolkit incentive up to ₹15,000, collateral-free loans up to ₹3 lakh at 5% interest with 8% government subvention and digital transaction incentives of ₹1 per transaction up to 100 monthly.
Who can apply:
- Artisans and craftspeople engaged in any of the 18 specified trades.
- One member per family is eligible.
MSME Champions Scheme
It combines technology and competitiveness support into three different components. The Zero Defect Zero Effect (ZED) Certification grants subsidy assistance between 50% and 100% and handholding support of up to ₹2 lakh. MSME Innovative provides up to ₹15 lakh per idea for incubation, intellectual property rights (IPR) and design. Lean Manufacturing supports waste reduction with funding up to ₹2.16 lakh at the advanced level.
Who can apply:
- All Udyam-registered MSMEs for ZED and Lean components.
- MSMEs, individuals and students for the Innovative component through registered host institutions.
Raising and Accelerating MSME Performance (RAMP)
This is a World Bank-supported scheme aimed at improving MSME access to markets, finance and technology through state government participation. It focuses on technology upgradation, digitisation, receivable financing and reducing delayed payments and targets over 5.5 lakh MSMEs during the five-year implementation period.
Who can apply:
- Individual MSMEs through state government agencies.
- Implemented at the state level, businesses apply through their respective state agencies.
How to apply for MSME government schemes?
While each scheme has its own portal and process, the steps below apply broadly across most MSME schemes available to businesses.
- Register on Udyam’s official website before applying for any scheme. Registration is free, and a valid Udyam Registration Certificate is a prerequisite for most MSME schemes. Artisans applying under PM Vishwakarma may instead register at the nearest Common Service Centre.
- Review the official scheme booklet available on the Ministry of MSME’s website to identify the scheme that best addresses your business needs, whether it is credit support, skill development, market access or technology upgradation.
- Apply through the designated application channel for your chosen scheme. Several schemes have dedicated online portals for direct applications. CGTMSE applications are submitted through participating banks or NBFCs, while schemes such as SFURTI and RAMP require applications to be made through implementing agencies or state government bodies.
- Keep the required documents ready before submitting your application. Commonly required documents include the Udyam Registration Certificate, Aadhaar card, PAN card, bank account details, business address proof and, where applicable, a project report.
- Contact your nearest MSME Development and Facilitation Office (MSME-DFO) if you need guidance on scheme selection, eligibility or the application process. MSME-DFOs operate across 32 locations in India and can also help resolve application-related queries.
Conclusion
Government schemes for MSMEs cover credit access, skill development, market linkages and technology support, most accessible through online portals after completing Udyam registration. Identifying the right scheme and applying through the correct channel can significantly improve a business's chances of accessing government support.
For managing finances, GST compliance and records alongside growth, TallyPrime brings accounting, inventory and reporting together in one platform. Start your free trial today and keep your business organised as it grows.
