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Achieving Efficiencies in MSME Sector through Convergence of Schemes
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026 ACHIEVING
EFFICIENCIES IN
MSME SECTOR
THROUGH
CONVERGENCE
OF SCHEMES DISCLAIMER:
Administrative Staff College of India, Hyderabad
has received financial assistance under the Research
Scheme of NITI Aayog to prepare the report. While
due care has been exercised to prepare the report
using the data from various sources, NITI Aayog
does not confirm the authenticity of data and
accuracy of the methodology to prepare the report.
NITI Aayog shall not be held responsible for the
findings or opinions expressed in the document.
This responsibility completely rests with ASCI ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- iii
AUTHORS
Administrative Staff College of India (ASCI)
Principal Investigator
Dr. Karnak Roy, Associate Professor, ASCI
Dr. Sweety Pandey, Assistant professor, ASCI
karnak.roy@asci.org.in, sweety.pandey@asci.org.in
Research Team
Ms. Surabhi Mishra, Senior Research Associate, ASCI
Dr. Raman Ghosh, Assistant Professor, ASCI
Ms. Krishnapriya Deshapaka, Research Intern, ASCI
STUDY ADVISORS
Dr. Nirmalya Bagchi, Professor and Director, ASCI Business School
Dr. Valli Manickam, Dean of Research Studies (DoRS), ASCI
Amit Mohan Prasad, retd. IAS, Additional Chief Secretary, Government of Uttar
Pradesh ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- v
CONTENTS
Disclaimer.................................................................................................................................................................ii
Author’s page........................................................................................................................................................iii
Preface.....................................................................................................................................................................vii
Acknowledgement...............................................................................................................................................ix
Message, Vice Chairman, NITI Aayog.........................................................................................................xi
Message, Member, NITI Aayog....................................................................................................................xiii
Message, Chief Executive Officer, NITI Aayog.......................................................................................xv
Message, Programme Director, NITI Aayog..........................................................................................xvii
List of Abbreviations........................................................................................................................................xix
List of Tables.....................................................................................................................................................xxiii
List of Figures...................................................................................................................................................xxiv
Executive Summary.........................................................................................................................................xxv
1. MSMEs as Growth Engines of the Economy.........................................................01
1.1. Role of Micro, Small, and Medium Enterprises (MSMEs) in
the Economic Development............................................................................................................02
1.2. Micro, Small, and Medium Enterprises (MSMEs) and
its Attached Organizations...............................................................................................................06
2. The Case for Convergence:.......................................................................................09
2.1. Overview of Micro, Small, and Medium Enterprises (MSMEs) Schemes....................10
2.2. The Need of Convergence for Sustainable Growth..............................................................12
3. Convergence Models and Best Practices................................................................ 15
3.1. Framework for Effective Convergence:........................................................................................16
3.1.1. Information Convergence...........................................................................................................16
3.1.2. Process Convergence..................................................................................................................16
3.2. Best Practices.............................................................................................................................................17
3.2.1. Best Practices for Information Convergence................................................................. 17
3.2.2. Best Practices for Process Convergence....................................................................... 22
4. Insights on Convergence Opportunities................................................................. 33
4.1. Methodology...............................................................................................................................................34
4.2. Ministry of MSME Schemes: Similarities and Uniqueness..................................................36
4.3. Insights from Stakeholder Consultations...................................................................................50
5. Recommendations for Convergence and Way Forward....................................59
Recommendation 1: Centralized Portal for MSMEs:...................................................................... 60 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- vi
Contents
Recommendation 2: Micro and Small Enterprises -
Cluster Development Programme’ (MSE-CDP) and Scheme of
Fund for Regeneration of Traditional Industries (SFURTI)........................................................65
Recommendation 3: Converge Skill Development Programmes.............................................71
Recommendation 4: Procurement and Marketing
Support (PMS) & International Cooperation (IC)............................................................................ 78
Recommendation 5: MSME Innovative & a
Scheme for Promoting Innovation, Rural
Industry & Entrepreneurship (ASPIRE).................................................................................................84
Recommendations for Convergence and Way Forward...........................................................90
6. Annexures.........................................................................................................................91
Annexures-1: MoMSME Schemes..............................................................................................................91
Annexures-2: State Schemes:....................................................................................................................93
Telangana...............................................................................................................................................................93
Maharashtra..........................................................................................................................................................94
West Bengal.........................................................................................................................................................94
Uttar Pradesh......................................................................................................................................................95
Gujarat....................................................................................................................................................................96
Tamil Nadu.............................................................................................................................................................97 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- vii
PREFACE
Micro, Small, and Medium Enterprises (MSMEs) are vital in India’s economic landscape,
contributing significantly to employment generation, industrial output, and exports. These
enterprises are a backbone for innovation and entrepreneurship, fostering inclusive
economic growth. Recognizing their importance, the Ministry of MSME has introduced
multiple schemes to provide financial assistance, skill development, infrastructure support,
marketing aid, and technological upgradation. However, the presence of overlapping
objectives and fragmented implementation across various ministries and departments
might increase inefficiencies, affecting the effectiveness of these schemes. Addressing
these challenges through a structured approach is critical for maximizing their impact and
ensuring optimal utilization of resources.
This report, Achieving Efficiencies in MSME Sector through Convergence of Schemes
highlights the need for streamlining MSME schemes to enhance their efficiency and
accessibility. Convergence is proposed as a strategic approach to optimize policy execution
and resource allocation. It can be categorized into two key types: Information Convergence,
which integrates government-generated data at central and state levels to improve
coordination and decision-making, and Process Convergence, which aligns operational
frameworks by merging similar schemes, consolidating components, streamlining programs
into umbrella schemes, fostering Centre-State collaboration, and ensuring inter-ministerial
coordination.
As part of the consultation process, discussions were held with officials from the Ministry
of Micro, Small & Medium Enterprises (MoMSME) to gain insights into existing policies
and regulatory frameworks. In addition to government consultations, discussions were
also held with key industry stakeholders to incorporate their perspectives on the needs
and challenges faced by MSMEs. Inputs were gathered from senior officials and experts
from the Federation of Telangana Chambers of Commerce and Industry (FTCCI), Indian
Industries Association (IIA), World Trade Centre (WTC), Association of Lady Entrepreneurs
of India (ALEAP), Industry Development Council (IDC), Industry, Commerce & Export
Promotion Department of the Government of Telangana, Maharashtra Small Scale Industries
Development Corporation (MSSIDC), Department of MSME & Export Promotion of the
Government of Uttar Pradesh, Small Industries Development Bank of India (SIDBI), and
other banking institutions. Additionally, the team engaged with the management, CEOs,
and other stakeholders of the MSMEs. Drawing upon extensive research and stakeholder
consultations, this report identifies key challenges in MSME scheme implementation and
explores convergence opportunities to enhance their efficiency and impact. ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- ix
ACKNOWLEDGEMENT
The authors extend their sincere gratitude to NITI Aayog for its leadership, guidance, and
support in the successful completion of this study on the convergence of MSME schemes.
We would like to express our deep appreciation to Shri Suman K. Bery, Vice Chairman,
NITI Aayog; Dr. Arvind Virmani, Member, NITI Aayog; and Shri B.V.R. Subrahmanyam,
CEO, NITI Aayog, whose vision and encouragement have been instrumental in shaping
this report. Their strategic insights and unwavering support were invaluable throughout
the process, helping to refine the approach toward streamlining MSME programs under
cooperative federalism.
Furthermore, we would like to extend our heartfelt gratitude to Shri Ishtiyaque Ahmed,
Program Director, Industry and Foreign Investment Division, for his steadfast support
and incisive feedback. His expertise played a crucial role in ensuring that this report
presents a robust policy framework tailored to the unique challenges of MSME scheme
implementation and convergence. We would also like to acknowledge Ms. Neha Nautiyal,
Deputy Secretary, NITI Aayog; Ms. Aashwita Lal, Director, NITI Aayog; Shri Upendra Kumar
Gupta, Deputy Advisor, Shahid Qayoom, Consultant, NITI Aayog; and Karun Gupta, Young
Professional, NITI Aayog, for their valuable insights and continuous support throughout the
study. Their contributions have significantly enriched the depth and practical relevance of
this report. This study is a reflection of the collective efforts of all stakeholders dedicated
to strengthening the MSME ecosystem in India. MESSAGE
VICE CHAIRMAN,
NITI AAYOG MESSAGE
MEMBER,
NITI AAYOG MESSAGE
CHIEF EXECUTIVE OFFICER,
NITI AAYOG
Message
Micro, Small and Medium Enterprises (MSMEs) contribute around 29% to the nation's
GDP, generate employment for over 28.7 crore individuals, and support nearly 46% of our
exports. Their importance extends beyond mere numbers, as they drive inclusive growth,
foster innovation, and provide livelihood, particularly in rural areas, where entrepreneurial
spirit continues to thrive despite infrastructural challenges. This report examines the
convergence of MSME programmes under cooperative federalism, a topic that carries
significant relevance, given` the critical role of the MSME sector in our economy:
The convergence of various government schemes in India is essential to maximize their
impact, avoid duplication of efforts, and ensure efficient resource utilization. By integrating
multiple initiatives, service delivery can be enhanced and administrative processes can be
streamlined. This approach fosters inclusive growth, reduces gaps in implementation, 'and
promotes sustainable development across sectors.
The findings of this study highlight that while the MSME sector has maintained a
steady growth rate and made considerable contributions to GDP and exports, there is scope
to improve service delivery, scheme coordination, and effective outreach. To ensure that the
benefits of government schemes reach all segments of the MSME community, enhanced
coordination among central, state, and local government agencies is vital. This can address
challenges such as fragmented support systems, limited outreach of schemes, and| low
awareness levels and thereby, improve the overall efficacy of government interventions.
I extend my heartfelt gratitude to Hon'ble Vice Chairman NITI Aayog, Shri Suman
Bery, Hon'ble Member NITI Aayog, Dr Arvind Virmani and CEO NITI Aayog, Shri BVR
(Subrahmanyam for their continuous guidance provided during the course of this study. I
also compliment Administrative Staff College of India and their dedicated team for
undertaking this important work.
?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xix
LIST OF ABBREVIATIONS
AIDCAssam Industrial Development Corporation
AIFsAlternative Investment Funds
APIIC Andhra Pradesh Industrial Infrastructure Corporation
ASPIRE A Scheme for Promotion of Innovation, Rural Industry &
Entrepreneurship
ATIAssistance to Training Institutions
BIBusiness Incubators
BRSBusiness Registration Service
CAFCommon Artisan Fund
CAGRCompound Annual Growth Rate
CBFTE Capacity Building of First Time MSE Exporters
CFCsCommon Facility Centres
CFPCluster Facilitation Project
CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises
CGWBCentral Ground Water Board
CLCSS Credit Linked Capital Subsidy Scheme
CSRCorporate Social Responsibility
CVYCoir Vikas Yojana
CWCCentral Water Commission
DAY - NRLM Deendayal Antyodaya Yojana – National Rural Livelihood Mission
DBTDirect Benefit Transfers
DC-MSME Development Commissioner
DDU-GKY Deen Dayal Upadhyaya Grameen Kaushalya Yojana
DFSDepartment of Financial Services
DFSDepartment of Financial Services
DGFTDirectorate General of Foreign Trade
DICDistrict Industries Center
DoNER Development of the North Eastern Region
DPIIT Department for Promotion of Industry and Internal Trade ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xx
List of Abbreviations
DRDODefence Research Development Organization
DSRDiagnostic Study Report
DSTDepartment of Science and Technology
EA Einheitlicher Ansprechpartner
EAPEntrepreneurship Awareness Programme
EPCGExport Promotion Capital Goods
ESDPEntrepreneurship and Skill Development Programme
FGDsFocus Group Discussions
FoFFund of Funds
GDPGross Domestic Product
GeMGovernment e-Marketplace
GoIGovernment of India
HIsHost Institutes
ICInternational Cooperation
IMDIndia Meteorological Department
IMEsInformal Micro Enterprises
IndEA India Enterprise Architecture
IPRIntellectual Property Rights
KGVYKhadi Gramodyog Vikas Yojana
KPIsKey performance indicators
KVICKhadi and Village Industries Commission
KVKsKrishi Vigyan Kendra
LBIsLivelihood Business Incubators
LLMLarge Language Model
M&EMonitoring and Evaluation
MDAMarket Development Assistance
MDPManagement Development programme
MEISMerchandise Exports from India Scheme
MeitY Ministry of Electronics and IT
MGIRI Mahatma Gandhi Institute for Rural Industrialisation
MGNREGA Mahatma Gandhi National Rural Employment Guarantee Scheme
MHIMinistry of Heavy Industries ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxi
List of Abbreviations
MIsMentor Institutes
MMMargin Money
MoFMinistry of Finance
MoFPI Ministry of Food Processing Industries
MoJSMain ministry- Ministry of Jal Shakti
MoMSME Ministry of Micro, Small, and Medium Enterprises
MoRDMinistry of Rural Development
MPSIDC Madhya Pradesh State Industrial Development Corporation
MSCMulti-Sectoral Collaboration
MSDEMinistry of Skill Development & Entrepreneurship
MSE-CDP Micro & Small Enterprises Cluster Development Programme
MSEsMicro and Small Enterprises
MSMEMicro, Small, and Medium Enterprises
MSMED Micro, Small, and Medium Enterprises Development
NABARD National Bank for Agriculture and Rural Development
NBFCs Non-Banking Financial Companies
NCSNational Career Service
NEIDS North-East, combines the North East Industrial Development
Scheme
NIDHI-iTBI NIDHI-inclusive Technology Business Incubator
NIMSME National Institute for Micro, Small and Medium Enterprises
NRSCNational Remote Sensing Centre
NSICNational Small Industries Corporation
NSQFNational Skills Qualifications Framework
NVCFL NSIC Venture Capital Fund Limited
ODOPOne District, One Product
PMAGY Combines Pradhan Mantri Adarsh Gram Yojana
PM-AJAY Pradhan Mantri Anusuchit Jaati Abhyuday Yojana
PMEGP Prime Minister’s Employment Generation Programme
PMKVY Pradhan Mantri Kaushal Vikas Yojana
PMRYPrime Minister’s Rojgar Yojana
PMSProcurement and Marketing Support
PPPPublic-Private Partnership ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxii
List of Abbreviations
PRIsPanchayati Raj Institutions
PSIEC Punjab Small Industries & Export Corporation
PSUspublic sector undertakings
RAMPRaising & Accelerating MSME Performance
RBIReserve Bank of India
REGPRural Employment Generation Programme
RSETIs Rural Self Employment Training Institutes
S&TScience and Technology
SAMPADA Scheme for Agro-Marine Processing and Development of Agro-
processing Clusters
SFCStanding Finance Committee
SFCsState Financial Corporations
SFURTI Scheme of Fund for Regeneration of Traditional Industries
SHGsSelf-Help Groups
SIDBI Small Industries Development Bank of India
SIPStrategic Investment Plan
SPVSpecial Purpose Vehicle
SRISelf-Reliant India
TBITechnology Business Incubator
TCsTechnology Centres
TUSTechnology Upgradation Scheme
UAPUdyam Assist Platform
ULBUrban Local Body
UtsUnion Territories
ZEDZero Defect Zero Effect ?c"i0in! E ficincis in MSME Scto, t",o/!" Con0,!nc o Sc"'s xxiii
LIST OF TABLES
Table 1.1 MSME Classification...........................................................................................................................2
Table 2.1 Other Initiatives for MSME...............................................................................................................11
Table 3.1 Past Information Convergence Initiatives in India.................................................................17
Table 3.2 Merger of Similar Schemes in the past.....................................................................................23
Table 3.3 Merger of Similar Components in the past.............................................................................23
Table 3.4 Umbrella Schemes............................................................................................................................24
Table 3.5 Collaborative Centre-State Convergence................................................................................25
Table 3.6 Inter-departmental Convergence...............................................................................................26
Table 4.1 Details of Six workshops...............................................................................................................34
Table 4.2 Details of FGDs with MoMSME and Bankers.......................................................................... 35
Table 4.3 PMEGP Snapshot..............................................................................................................................37
Table 4.4 CGTMSE Snapshot............................................................................................................................38
Table 4.5 SRI Fund Snapshot...........................................................................................................................38
Table 4.6 PMS Snapshot....................................................................................................................................39
Table 4.7 International Cooperation Snapshot.........................................................................................39
Table 4.8 Similarities and Uniqueness of Procurement and Marketing Scheme
& International Cooperation Scheme.......................................................................................40
Table 4.9 ASPIRE Snapshot.............................................................................................................................40
Table 4.10 MSME Champions Snapshot..........................................................................................................41
Table 4.11 Similarity between ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)...........................................................................42
Table 4.12 SFURTI Snapshot.............................................................................................................................42
Table 4.13 MSE-CDP Snapshot.........................................................................................................................43
Table 4.14 Similarity between MSE-CDP and SFURTI.............................................................................43
Table 4.15 Skill Development Snapshot........................................................................................................44
Table 4.16 ATI Snapshot......................................................................................................................................44
Table 4.17 Technology Centres Snapshot....................................................................................................45
Table 4.18 Promotion of MSME in NER Snapshot.....................................................................................45
Table 4.19 National SC-ST Hub Snapshot....................................................................................................46
Table 4.20 RAMP Snapshot.................................................................................................................................47
Table 4.21 Coir Vikas Yojana Snapshot..........................................................................................................47
Table 4.22 Khadi Gramodyog Vikas Yojana Snapshot.............................................................................48
Table 4.23 PM Vishwakarma Snapshot..........................................................................................................48
Table 5.1 Comparison between proposed portal and existing portals of MSMEs.......................61
Table 5.2 Comparison between proposed portal and best practices..............................................62
Table 5.3 Comparison between MSE-CDP and SFRUTI....................................................................... 64
Table 5.4 Skill required for MSMEs................................................................................................................69
Table 5.5 Comparison between Procurement and Marketing Support (PMS) and
International Cooperation (IC) Scheme...................................................................................77
Table 5.6 Comparison between MSME Innovative and ASPIRE.........................................................83 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxiv
LIST OF FIGURES
Figure 1.1: Contribution to GDP..........................................................................................................................3
Figure 1.2: Contribution to Export......................................................................................................................3
Figure 1.3: Regional Presence of MSME Units................................................................................................4
Figure 1.4: Share of Manufacturing and Services Enterprises.................................................................5
Figure 1.5: Government Spending on MSME..................................................................................................5
Figure 1.6: MSME Organizational Setup...........................................................................................................6
Figure 3.1: Canada’s BizPal Interface..............................................................................................................20
Figure 3.2: Singapore’s GoBusiness Licensing Portal Interface..............................................................21
Figure 3.3: Maharashtra State Enterprises-Cluster Development Programme................................28
Figure 4.1: PMEGP Target Vs Achieved (Disbursement).......................................................................... 37
Figure 4.2: Barriers in scheme mobilization...................................................................................................51
Figure 4.3: MSE-CDP and SFURTI.....................................................................................................................53
Figure 4.4: Opinion on ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)...........................................................................54
Figure 4.5: Skill support required by MSMEs................................................................................................56 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxv
EXECUTIVE SUMMARY
Micro, Small, and Medium Enterprises (MSMEs) play a vital role in India’s economy by
contributing significantly to employment generation, industrial output, and exports.
They form the backbone of innovation and entrepreneurship, serving as key drivers of
inclusive and sustainable economic growth. To support this sector, the Ministry of MSME
currently implements 18 schemes aimed at providing financial assistance, skill development,
infrastructure support, marketing aid, and technological upgradation. However, the presence
of overlapping objectives and fragmented implementation across multiple ministries and
departments has at times resulted in inefficiencies, duplication of efforts, and limited
beneficiary outreach. In light of these challenges, convergence approaches are proposed
to streamline policy implementation, enhance inter-ministerial coordination, and ensure
more effective and efficient allocation of resources.
India has experimented with multiple models of convergence, which can broadly be
categorized into two types. Information Convergence involves integrating government-
generated data at both the central and state levels to strengthen coordination and improve
decision-making. Process Convergence focuses on aligning operational frameworks through
strategies such as merging similar schemes or components, consolidating programs under
umbrella schemes, fostering Centre–State collaboration, and establishing inter-ministerial
coordination mechanisms.
This study aims to achieve the following objectives:
1. To evaluate the various Government of India (GoI)schemes and programmes of the
MSME sector.
2. To examine the present level of convergence of MSME programmes.
3. To identify the best practices of convergence in center, states and internationally.
4. To make recommendations on the convergence opportunities and corrective steps.
These objectives aim to provide a comprehensive understanding of how convergence
can be leveraged to build a more coherent, responsive, and impactful policy ecosystem
for the MSME sector.
Methodology:
The study adopts a mixed-methods approach combining secondary research and extensive
stakeholder consultations to identify convergence opportunities of MoMSME schemes. The
methodology consists of the following key steps:
1. Review of MoMSME Schemes
All existing schemes were reviewed based on eligibility, target beneficiaries, areas of
support, intervention types, and implementing agencies. This helped map the scheme
landscape and identify overlaps. ?chieving fqciencie- in S Sector through Convergence of Scheme- xxvi
Executive Summary
2. Identification of Uniqueness, Similarities, and Duplication
The analysis focused on detecting thematic overlap and duplication across schemes
to understand gaps, inefficiencies, and areas where convergence may be beneficial.
3. Stakeholder Consultation Workshops and Focus Group Discussions (FGDs)
To validate findings and gather practical insights, workshops were conducted across
six locations—Mumbai, Lucknow, Chennai, Tiruppur, Guntur, and Hyderabad. The
workshops and FGDs with key stakeholders helped capture operational challenges
and expectations related to scheme convergence. The participants included officials
from the Ministry of MSME, state departments, banks, industry associations, and MSME
representatives.
4. Development of the Convergence Framework
Insights from the review and consultations were synthesised to design a proposed
convergence model, outlining justification, implementation pathways, and potential
challenges.
Recommendations:
The following recommendations are proposed to facilitate convergence across centrally
administered schemes to enhance policy coherence, operational efficiency, and targeted
delivery of support to MSMEs:
1. Centralized Portal For Micro, Small And Medium Enterprises
(MSMEs)
To enhance information convergence and streamline access to MSME support, a centralized
digital portal integrating schemes, compliance requirements, financial assistance, and
market insights is recommended. This AI-powered platform will provide real-time
guidance, personalized scheme recommendations, and seamless tracking of applications
through an interactive dashboard. The portal should include key modules such as scheme
information, compliance tracking, financial assistance, and market research, with AI-driven
chatbots and mobile app integration for accessibility. By collaborating with technology
research institutions and digital governance bodies, the proposed initiative will simplify
MSME operations, improve compliance efficiency, and provide critical market intelligence,
ensuring a more effective and transparent support system.
2. Convergence of Scheme of Fund for Regeneration of
Traditional Industries (SFURTI) with the Micro and Small
Enterprises - Cluster Development Programme (MSE-CDP)
To streamline cluster development efforts and optimize resources, it is recommended
to integrate SFURTI with MSE-CDP. While both schemes focus on cluster-based
development, MSE-CDP aims at enhancing infrastructure and competitiveness, whereas
SFURTI supports traditional industries, particularly in uncovered and aspirational districts.
The proposed convergence framework includes the creation of a special category for
traditional industries within MSE-CDP, maintaining SFURTI’s objectives while benefiting ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxvii
Executive Summary
from a unified governance structure. Local institutions such as NGOs and Panchayati Raj
Institutions (PRIs) may continue to play a role in traditional industry clusters, ensuring
regional expertise and stakeholder involvement.
3. Convergence of Skill Development Programmes
Multiple government schemes focus on entrepreneurship, technical skills, and rural
craftsmanship, often with overlapping objectives. A coordinated skill development framework
will ensure a more structured and responsive training approach for MSMEs. The proposed
convergence strategy should follow a three-tiered approach. (i) Entrepreneurship and
Business Skills Development – Merge skill components of PMEGP, IC, and PMS under ESDP
to offer training in entrepreneurship, financial literacy, market access, export readiness,
and credit facilitation. (ii) Technical Skill Development – Enhance coordination among
Tool Rooms, Technology Centres, MSME Lean Scheme, and digital initiatives, ensuring
specialized technical training aligned with industry requirements. (iii) Training for Rural and
Women Artisans – Continue skill-building initiatives under Coir Vikas Yojana, National SC-
ST Hub, and Khadi & Village Industries programmes, preserving their focus on traditional
crafts, rural entrepreneurship, and marginalized communities.
4. Convergence of Procurement and Marketing Scheme (PMS)
and International Cooperation (IC) Schemes
To simplify access to marketing support for MSMEs and enhance their domestic and
international market reach, it is recommended to converge PMS and IC under a unified
Marketing Assistance Wing with two key components: Domestic Marketing Assistance
and International Marketing Assistance. The Domestic Marketing Assistance wing may
focus on capacity building through ESDP, organizing and participating in domestic trade
fairs/exhibitions, and domestic procurement. The International Marketing Assistance wing
may focus on capacity building through ESDP for first-time exporters, organizing and
participating in international trade fairs/exhibitions, and Framework for International Market
Intelligence Dissemination.
5. Convergence of A Scheme for Promoting Innovation, Rural
Industries & Entrepreneurship (ASPIRE) with MSME Innovative
To streamline innovation support for MSMEs, it is recommended to merge ASPIRE
with MSME Innovative under a special category for agro-rural enterprises. Under the
convergence framework, it is suggested that ASPIRE be integrated as a dedicated agro-
rural enterprise category within MSME Innovative. A portion of MSME Innovative’s budget
may be earmarked for agro-rural incubators, ensuring continuity of financial support. A
structured implementation framework will guide the transition, including strategic planning,
stakeholder engagement, funding allocation, and performance monitoring.
Conclusion:
For schemes with similar objectives, convergence should be prioritized through a well-
coordinated governance structure that enables smoother implementation and greater ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxviii
Executive Summary
efficiency. Such convergence can be strengthened by fostering collaboration among
ministries and implementing agencies through workshops, joint trainings, and targeted
outreach, which would enhance scheme impact and improve beneficiary mobilization.
Capacity-building of administrators should also be emphasized to ensure better targeting
and delivery of support.
At the same time, convergence efforts must be approached with caution for schemes
designed for specific beneficiary groups, such as the National SC/ST Hub or the NER
MSME Promotion Programme, to prevent dilution of their intended impact. Similarly, large
flagship programmes like PMEGP and PM Vishwakarma should remain independent due
to their substantial scale, distinct objectives, and focused economic benefits. 01
MSMES AS
GROWTH
ENGINES OF
THE ECONOMY Achieving Efqciencies in MSME Sector through Convergence of Schemes 2
1.1 ROLE OF MICRO, SMALL, AND MEDIUM ENTERPRISES
(MSMES) IN THE ECONOMIC DEVELOPMENT
The Micro, Small, and Medium Enterprises (MSME) sector is the foundation stone of
India’s economic framework, encompassing a diverse range of businesses with varying
levels of scale, technology, and innovation. These enterprises play a critical role in driving
economic development by contributing significantly to Gross Domestic Product (GDP),
Export, generating employment, and supporting regional and sectoral growth. The sector
is characterized by diverse range of businesses that vary in size, technological capability,
and employment generation. With the capacity to produce 6,000 distinct products,
MSMEs play a pivotal role in catering to the demand for mass consumption goods.
Given its strategic importance, the MSME sector has the potential to serve as an engine
of economic growth, provided it is supported by a conducive policy environment and
targeted developmental initiatives.
CLASSIFICATION:
In accordance with the provision of Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 of Government of India, a classification came into effect on 1st July,
2020, based on investment in plant and machinery and turnover. A revised classification
has come into effect from April 1, 2025, as per the Ministry of MSME’s Notification S.O.
No. 1364(E) dated March 21, 2025.
Table 1.1. MSME Classification
Enterprise
Earlier ClassificationRevised Classification
Investment
in plant and
machinery
Turnover
Investment
in plant and
machinery
Turnover
Micro
Not exceeding
Rs. 1 crore.
Not exceeding Rs.
5 crores.
Not exceeding
Rs. 2.5 crore.
Not exceeding
Rs. 10 crores.
Small
Not exceeding
Rs. 10 crores.
Not exceeding Rs.
50 crores.
Not exceeding
Rs. 25 crores.
Not exceeding
Rs. 100 crores.
Medium
Not exceeding
Rs 50 crores.
Not exceeding Rs.
250 crores.
Not exceeding
Rs 125 crores.
Not exceeding
Rs. 500 crores.
ECONOMIC CONTRIBUTION:
The growth of MSME sector is at par with the Industrial Sector for the last two decades. Between 2000 and 2016, the industrial sector grew at an average of around 7.6%, while the MSME sector averaged 8.6% growth
1
. Between 2017 and 2023, the sector contributed
between 27% and 30% to the GDP of the country
2
.
1 Report of the Expert Committee on Micro, Small and Medium Enterprises (2019)
2 CONTRIBUTION OF MSMEs TO THE GDP https://www.pib.gov.in/PressReleasePage.aspx?PRID=2035073 Achieving Efqciencies in MSME Sector through Convergence of Schemes 3
29.7
30.5 30.5
27.3
29.6
30.1
25
26
27
28
29
30
31
2017-182018-192019-202020-212021-222022-23
Share of MSME GVA in All India GDP (in %)
Share of MSME GVA in All India GDP (in %)
Figure 1.1: Contribution to GDP
Accounting to this growth, the sector employs 62%
3
of the country’s workforce that is
approximately 28.13 crores
4
which in terms of volume stands next to the agriculture sector
only. MSMEs’ share in the country’s export is about 45%
5
although approximately only
1.1% of MSMEs registered on the Udyam Portal are engaged in export activities
6
. Their
export contribution peaked at 49.77% just before the COVID-19 pandemic.
REGIONAL PRESENCE:
49.75%
49.35%
45.03%
43.59%
45.73% 45.79%
40%
41%
42%
43%
44%
45%
46%
47%
48%
49%
50%
51%
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25*
% share of Export of MSME related products in All India Export
Figure 1.2: Contribution to Exports (*up to May 2024)
3 A microscope on small businesses: The productivity opportunity by country. McKinsey Global Institute
(MGI). (2024).
4 As per Udyam Registration Portal
5 CONTRIBUTION OF MSMEs TO THE GDP https://www.pib.gov.in/PressReleasePage.aspx?PRID=2035073
6 EXIM Report (2023) Achieving Efqciencies in MSME Sector through Convergence of Schemes 4
Rural
51%
Urban
49%
Regional PresenceOf MSMEs
Figure 1.3: Regional Presence of MSMEs
The distribution of MSMEs is marginally skewed in favour of rural areas, which account
for 51% of the total, compared to 49% in urban areas
7
. This reflects the entrepreneurial
spirit that thrives across India despite infrastructural challenges. However, the majority of
rural MSME units remain informal and unregistered, with limited access to digital tools and
platforms
8
. This has neccesitated the fomalization of MSMEs across the country.
FORMALIZATION:
Pushing forward the objective of MSME formalisation, Government of India (GoI) launched
the Udyam Registration Portal in 2020 to simplify the registration process. This initiative
is expected to induce MSMEs to come into the fold of formalisation and avail the benefits
of the various schemes and facilities extended to the sector. Retail and Wholesale trades
have also been included as MSMEs for this purpose
9
. To rationalize the informal sector,
the Ministry, in collaboration with the Small Industries Development Bank of India (SIDBI),
introduced the Udyam Assist Platform (UAP) in January 2023, to integrate Informal Micro
Enterprises (IMEs) into the formal sector. The Udyam Registration Portal enables existing
enterprises to self-register online, free of cost and paperless, to obtain a Udyam Registration
Certificate, whereas the Udyam Assist Platform helps informal micro enterprises without
the required documents register through designated agencies and receive an equivalent
certificate.
MARKET SIZE:
Till 2016, there were 6.34 crore
10
unincorporated nonagricultural MSMEs in the country
engaged in different economic activities
11
. About 3.94 crore MSMEs are registered on the
7 MSME Annual Report (2023-24)
8 Source: MSME DEPARTMENT, GOVERNMENT OF TN, 2021
(www.msmeonline.tn.gov.in/images/MSME_Committee_Draft_Report.pdf)
9 SIDBI Annual Report 2021-22 (https://development.sidbi.in/AnnualReport202122/msme-outlook.php)
10 As per the latest National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation
11 Non-agricultural enterprises which are not incorporated (i.e. not registered under Companies Act, 1956) include proprietary and partnership enterprises (excluding limited liability partnerships), Self Help Groups (SHGs), Non-Profit Institutions (NPIs) and Trusts. Achieving Efqciencies in MSME Sector through Convergence of Schemes 5
Udyam Registration Portal. Another 2.71 crore informal micro enterprises are registered
on the Udyam Assist Platform. This number is expected to grow from 6.34 crore to
approximately 7.5 crore, growing at a projected Compound Annual Growth Rate (CAGR) of
2.5%. As on October 2024, out of the registered MSMEs, 25% are engaged in manufacturing,
while 75% are involved in service activities
12
.
Manufacturing,
99,19,469
Service,
2,95,44,064
0%20% 40% 60% 80% 100%
Activity wise registration of MSMEs
Figure 1.4: Share of Manufacturing and Services Enterprises
GOVERNMENT SPENDING ON MSME SECTOR:
Several measures are being undertaken for the holistic development of the sector. Among other steps, the government spending on the sector has risen to 22,094 crores in 2023-
24 from 6,717 crores in 2019-20.
13
6,717.53
22,094.25
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
2019-20 2020-21 2021-222 022-23 2023-24
Budget Outlay -Actuals
(Rs. in Crores)
Financial Year
Last Five Years MSME Budget
Figure 1.5: Government Spending on MSME
12 Source: Udyam Registration Portal (https://udyamregistration.gov.in/RealTimeUdyamDashboard.aspx)
13 MSME Budget 2024 Achieving Efqciencies in MSME Sector through Convergence of Schemes 6
1.2 MICRO, SMALL, AND MEDIUM ENTERPRISES
(MSMES) AND ITS ATTACHED ORGANIZATIONS
MSME ORGANIZATION STRUCTURE
Figure 1.6: MSME Organizational Setup
Source: msme.gov.in/about-us/organization-setup
The Ministry of Micro, Small & Medium Enterprises (MSME) has several key organizations
attached to it, each with specific mandates to support the sector. Role of some of the
key bodies and departments include:
Officeofthe
Development
Commissioner (DC-
MSME)
eImplementingpoliciesandvariousprogramsforMSMEs
eAdvisingthegovernment onpolicyformulation,
eOffering consultancyservices,
eFacilitatingtechnologyupgradationandmodernization
eDevelopinghumanresourcesthrought rainingprograms
KhadiandVillage
Industries
Commission
(KVIC)
eRuralemploymentthroughkhadiandvillageindustries
eProducingsaleablearticlesandfosteringself-r eliancein
rural communities
eTraining,research,andprovidingrawmaterialstopeople
engagedinkhadiandvillageindustries ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 7
Officeofthe
Development
Commissioner (DC-
MSME)
fiImplementingpoliciesandvariousprogramsforMSMEs
fiAdvisingthegovernment onpolicyformulation,
fiOffering consultancyservices,
fiFacilitatingtechnologyupgradationandmodernization
fiDevelopinghumanresourcesthrought rainingprograms
KhadiandVillage
Industries
Commission
(KVIC)
fiRuralemploymentthroughkhadiandvillageindustries
fiProducingsaleablearticlesandfosteringself-r eliancein
rural communities
fiTraining,research,andprovidingrawmaterialstopeople
engagedinkhadiandvillageindustries
Coir Board
fiDevelopmentofthe coir industry
fiPromotingexports,research,andimprovingliving
conditionsforworkers
National Small
Industries
Corporation (NSIC)
fiPromotes thegrowthofMSMEs through schemes like
marketingsupport,creditfacilitation,andproviding
rawmaterials
fiOperates technical services centresacross India
NationalInstitute
for Micro, Small
and Medium
Enterprises
(NIMSME)
fiPremiertraininginstituteforMSMEdevelopment
fiOffers capacity-buildingprograms forentrepreneurs and
governmentofficials, forenhancingthecapabilities and
competitiveness of smallenterprises
Mahatma Gandhi
Institute for Rural
Industrialisation
(MGIRI)
fiResponsibleforacceleratingruralindustrialisationfor
sustainable villageeconomy
fiAttractprofessionals andexperts toGramSwaraj
fiEmpowertraditionalartisans,encourageinnovation
throughpilot study/fieldtrials andR&Dforalternative
In addition to the key bodies and offices mentioned above, various other institutions,
banks, and financial entities play a crucial role in the successful planning, implementation,
and monitoring of MSME schemes. For instance, organizations such as the National Bank
for Agriculture and Rural Development (NABARD), Small Industries Development Bank
of India (SIDBI), and State Financial Corporations (SFCs) contribute significantly to MSME
development through financial support, capacity building, and providing advisory services.
These institutions collaborate with the Ministry of MSME and Industry Associations to
ensure the smooth dissemination of information regarding schemes, enhance access to
credit, and monitor the effective implementation of these programs. ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 8
While the institutions have made remarkable contributions individually, a unified
approach that aligns their efforts is essential for holistic growth and sustainable
development of the MSME sector.
This is because MSMEs often face complex challenges due to the fragmented support system provided by multiple government agencies and schemes, which operate in silos
14
. It is argued that the present ecosystem of MSME suffers from
poor delivery of services at the field level
15
. The schemes and programmes have
limited outreach with a large number of very small schemes and that there is a lack of coordination among the various organisations involved in the promotion of MSMEs, including organisations of the State/UT Governments and poor linkages with the institutional stakeholders in the private sector. This necessitates the need for a converged and cohesive approach to maximize the benefits available to the sector. In the next chapter, the necessity to converge the efforts of every department and all the resources, for an effective planning, implementation and monitoring of a scheme is explored.
14 Source: ADB Briefs 2021 - Enhancing Competitiveness and Productivity of India’s Micro, Small, and Medium- Sized Enterprises during Pandemic Recovery
15 MSME Strategic Action Plan (https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan.pdf) 02
THE CASE
FOR
CONVERGENCE Achieving Efqciencies in MSME Sector through Convergence of Schemes 10
2.1 OVERVIEW OF MICRO, SMALL, AND MEDIUM
ENTERPRISES (MSMES) SCHEMES
The Ministry of MSME has launched 18 schemes targeted at providing credit and financial
assistances, skill development training, infrastructure development, marketing assistance,
technological and quality upgradation and innovation support, for MSMEs across the
country.
Credit
Assistance
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•CreditGuaranteeFund
TrustforMicroandSmall
Enterprises(CGTMSE)
•Self-Reliant India(SRI)Fund
•NationalSCSTHub
•PM Vishwakarma
Marketing
Assistance
•Procurementand
MarketingSupport(PMS)
•InternationalCooperation
(IC)
•CoirVikas Yojana(CVY)
•KhadiGramodyogVikas
Yojana(KGVY)
Credit
Assistance
Technology
Upgradation
dit
e
•Champions
•Raising&Accelerating
MSME Performance
(RAMP)
•TechnologyCenters
•CoirVikas Yojana(CVY)
Infrastructure
Development
• Micro & Small
Enterprises Cluster
Development
(MSE-CDP)
• Scheme of Fund for
Regeneration of
Traditional Industries
(SFURTI)
• Promotion of MSME in
NER
• Coir Vikas Yojana (CVY)
• Khadi Gramodyog Vikas
Yojana (KGVY)
Trainingand
Skill
Development
•AssistancetoTraining
Institutions (ATI)
•Entrepreneurshipand
SkillDevelopment
Programme(ESDP)
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•PM Vishwakarma
•CoirVikas Yojana(CVY)
Innovation
andResearch
Support
•ASchemeFor
PromotionOf
Innovation,Rural
Industry&
Entrepreneurship
(ASPIRE)
•Champions
• Prime Minister’s Employment Generation Programme (PMEGP)
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Self-Reliant India (SRI) Fund
• National SC ST Hub
• PM Vishwakarma Achieving Efqciencies in MSME Sector through Convergence of Schemes 11
2.1 OVERVIEW OF MICRO, SMALL, AND MEDIUM
ENTERPRISES (MSMES) SCHEMES
The Ministry of MSME has launched 18 schemes targeted at providing credit and financial
assistances, skill development training, infrastructure development, marketing assistance,
technological and quality upgradation and innovation support, for MSMEs across the
country.
Credit
Assistance
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•CreditGuaranteeFund
TrustforMicroandSmall
Enterprises(CGTMSE)
•Self-Reliant India(SRI)Fund
•NationalSCSTHub
•PM Vishwakarma
Marketing
Assistance
•Procurementand
MarketingSupport(PMS)
•InternationalCooperation
(IC)
•CoirVikas Yojana(CVY)
•KhadiGramodyogVikas
Yojana(KGVY)
Credit
Assistance
Technology
Upgradation
dit
e
•Champions
•Raising&Accelerating
MSME Performance
(RAMP)
•TechnologyCenters
•CoirVikas Yojana(CVY)
Infrastructure
Development
• Micro & Small
Enterprises Cluster
Development
(MSE-CDP)
• Scheme of Fund for
Regeneration of
Traditional Industries
(SFURTI)
• Promotion of MSME in
NER
• Coir Vikas Yojana (CVY)
• Khadi Gramodyog Vikas
Yojana (KGVY)
Trainingand
Skill
Development
•AssistancetoTraining
Institutions (ATI)
•Entrepreneurshipand
SkillDevelopment
Programme(ESDP)
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•PM Vishwakarma
•CoirVikas Yojana(CVY)
Innovation
andResearch
Support
•ASchemeFor
PromotionOf
Innovation,Rural
Industry&
Entrepreneurship
(ASPIRE)
•Champions
• Prime Minister’s Employment Generation Programme (PMEGP)
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Self-Reliant India (SRI) Fund
• National SC ST Hub
• PM Vishwakarma
The 18 schemes mentioned in the context of MSME development have been grouped
based on the type of support provided to MSMEs. It is important to note that many of
these schemes revolve around more than one focus area, often serving multiple purposes.
For example, the Prime Minister’s Employment Generation Programme (PMEGP) not only
provides financial assistance to set up micro and small enterprises but also incorporates
components of skill development for unemployed youth.
Apart from the schemes under the Ministry of Micro, Small, and Medium Enterprises
(MoMSME), the Government of India has also collaborated with various other ministries,
departments, and statutory bodies to launch key initiatives aimed at supporting and
enhancing the growth of MSMEs. Some of these key initiatives are listed in Table 2.1.
Table 2.1. Other Initiatives for MSME
InitiativeLaunched by
MUDRA Loans (Pradhan Mantri MUDRA Yojana - PMMY)
Government of India (GoI)
Implemented by Ministry of Finance. Partnered by various financial institutions
Direct Benefit Transfers (DBT)
Government of India (GoI)
Involves multiple ministries and departments, including the Ministry of Finance and Ministry of Electronics and Information Technology, to streamline subsidy and benefit transfers directly into the beneficiaries’ bank accounts.
Credit Guarantee Scheme for MSMEs
Ministry of MSME (MoMSME)
In collaboration with Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Public Procurement Policy
Government of India (GoI)
Central and state governments, along with public sector undertakings (PSUs)
Skill India Digital Platform
Ministry of Skill Development & Entrepreneurship (MSDE)
As part of Skill India Initiative. Partnered by Training Institutes, Employers, and Private Sector Stakeholders
Emergency Credit Line Guarantee Scheme (ECLGS)
Ministry of Finance (MoF)
As part of Aatma Nirbhar Bharat Abhiyan
MSME SAMBHAV
Ministry of MSME (MoMSME)
National Level Awareness Program
MSME Samadhaan
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations
MSME Sampark
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations
MSME Sambandh
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations Achieving Efqciencies in MSME Sector through Convergence of Schemes 12
2.2 THE NEED OF CONVERGENCE FOR SUSTAINABLE
GROWTH
Government initiatives mainly aim to improve quality of life or a particular aspect of it.
In doing so, sometimes, the initiatives tend to overlap in terms of their objectives and
impact they expect to create. These initiatives are spread across various departments or
ministries in the government requiring coordination and collaboration among all of them at
different levels. For instance, in the table mentioned above, there are numerous initiatives
taken by the GoI to support the growth of MSMEs through different collaborative partners.
Previous studies on MSME have highlighted a systemic weakness in the duplication of
same/similar programmes run by various Ministries/Departments for the same target
groups
16
. For instance, the Coir Board is situated in the ambit of the Ministry of MSME,
however, other Departments also invest in programmes for promotion of coir industry.
Similar issues are found for village industry sector where major investments, which are
not fully coordinated, are taking place from the Handicrafts Institutions as well as Rural
Development set up. Similar issues are being faced in various micro and small enterprise-
based sectors such as leather, handicrafts, etc.
PM’s task force on MSMEs suggested that there needs to be a convergence of schemes as far as possible on a single platform which will facilitate an easier and convenient delivery of benefits to the target group without any leakage
17
. Current
studies also highlight the urgent need for convergence and that policy structures need to be firmed up to facilitate effective implementation of these programmes to ensure that allocation results in outputs and outputs in outcomes
18
. A coordinated
effort can significantly reduce the risk of duplication and the confusion it causes in the beneficiary group
19
.
Ideally, the approach should be for agencies to work across portfolio boundaries, formally and informally, to achieve a shared goal and an integrated government response to particular issues to improve effectiveness and efficiency. This approach is also recognized by Sustainable Development Goal SDG 17 - Partnerships for the goals - multi-sectoral collaboration. Multi-Sectoral Collaboration (MSC) means multiple stakeholders and sectors intentionally coming together and collaborating in a managed process to achieve shared outcomes and common goals
20
. Convergence of all programmes in terms of funding,
support, inspection, and supervision mechanism will lead to maximize the benefits
accrued to the beneficiaries
21
.
16 Source: MSME Strategic Action Plan https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan. pdf
17 Report of Prime Minister’s Task Force on Micro, Small and Medium Enterprises, 2010
18 Press Information Bureau, Government of India, Ministry of Finance https://www.pib.gov.in/newsite/ PrintRelease.aspx?relid=70159
19 Source: MSME Strategic Action Plan https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan. pdf
20 https://sdgs.un.org/goals/goal17
21 MSME & Skills Convergence, Govt. of West Bengal Achieving Efqciencies in MSME Sector through Convergence of Schemes 13
The intended objectives of such convergence should be:
Single
Window
Mobilizationofbeneficiariesforallschemeson
asingleplatformthroughoutreachprogrammes
Centralized
Database
Real-timedatacaptureona singlecentralized
databaseb y seamlesslyintegratingthe
individualdatabases
Funds
Effectiveplanningforoptimumutilizationof
Central/StateGovernmentfunds
Infrastructure Optimumusageofavailableinfrastructure
Awareness
Widespreadcommunity connects,outreach
programmesatthegrass rootlevel
Monitoring
Effectivemonitoringandinspectionmechanismat
thegrassr ootlevelinvolvingresourcepoolfrom
individuali nstitutions
The next chapter draws on past research studies and best practices to outline
various approaches through which convergence can be implemented in the MSME
sector. 03
CONVERGENCE
MODELS AND
BEST PRACTICES Achieving Efqciencies in MSME Sector through Convergence of Schemes 16
3.1. FRAMEWORK FOR EFFECTIVE CONVERGENCE:
India’s journey toward enhanced governance has involved multiple models of convergence,
aiming to integrate information and processes across various levels of government. In the
context of policy implementation, convergence involves aligning and coordinating multiple
schemes to ensure they complement each other, reduce redundancies, and enhance overall
effectiveness Convergence can be broadly classified into two key types:
1. Information Convergence and
2. Process Convergence.
This chapter will delve into these convergence models to understand their implementation
and impact on governance through some best practices at national and international level.
3.1.1 Information Convergence
While breaking physical silos between ministries and departments can be challenging,
breaking virtual silos is a more achievable goal. Information convergence focuses on
integrating government-generated data at both the central and state levels. By effectively
sharing this data, there is possibility to enhance coordination, facilitate informed decision-
making, and ultimately improve governance outcomes. The availability and accessibility
of shared information serve as foundation of efficient, transparent, and accountable
governance.
3.1.2 Process Convergence
Process Convergence refers to the unification and alignment of various government
schemes, processes, and activities to reduce duplication, streamline operations, and deliver
services more effectively. It aims to create synergy by merging similar schemes, combining
common components, and promoting collaboration between different levels of government
and across ministries. This approach ensures that resources are used efficiently, overlaps
are minimized, and citizens receive services in a more coordinated and integrated manner.
Process Convergence can be carried out in one of the five ways mentioned below:
MergeSimilar
Schemes
MergeSimilar
components
Streamliningto
Createan Umbrella
Scheme
Collaborative
Centre-State
schemes
Interministerial
convergence
010203
0405 Achieving Efqciencies in MSME Sector through Convergence of Schemes 17
It is important to differentiate between convergence and merger in the context of
policy implementation. Convergence refers to the alignment and coordination of multiple
schemes to ensure they complement each other, reduce redundancies, and enhance
overall effectiveness. Under convergence, schemes maintain their individual structures but
work collaboratively by sharing resources, expertise, and implementation frameworks. This
allows for greater integration while preserving the unique objectives of each scheme.
Merger, while distinct, can be considered one form of convergence—one that involves fully
combining two or more schemes into a single entity by consolidating their objectives,
components, budgets, and administrative mechanisms. This results in a unified scheme
that replaces the original ones, thereby streamlining operations. However, a merger
represents only one end of the convergence spectrum and may not fully capture the
broader, more flexible approaches that convergence can encompass. Process convergence
can be operationalized in various ways, depending on the nature of the schemes and
administrative priorities.
3.2. BEST PRACTICES
3.2.1 Best Practices for Information Convergence
Some notable examples of information convergence initiatives from India include:
Table 3.1: Past Information Convergence Initiatives in India
Information
Convergence
Initiative
Description Key StakeholdersImpact
IndiaWRIS
22
A web-based database
providing real-time
information on surface
and groundwater
resources, and water
quality.
Main ministry-
Ministry of Jal Shakti
(MoJS);
Other agencies-
Central Water
Commission (CWC),
Central Ground Water
Board (CGWB),
India Meteorological
Department (IMD),
National Remote
Sensing Centre
(NRSC),
State govt- Andhra
Pradesh, Uttar
Pradesh and Gujarat
etc.
Informed decision-
making in water
resource management
22 https://pib.gov.in/PressReleasePage.aspx?PRID=1643776 Achieving Efqciencies in MSME Sector through Convergence of Schemes 18
Information
Convergence
Initiative
Description Key StakeholdersImpact
PM Gati Shakti
23
A digital platform for
coordinated planning
and implementation of
infrastructure projects.
16 Ministries (Central
Government)
Improved coordination
in infrastructure
development
DISHA
Dashboard
24
Enables monitoring of
project progress and
KPIs for 42 flagship
schemes across 20+
ministries.
20+ Ministries
(Central Government)
Enhanced accountability
and timely
intervention in scheme
implementation
India Enterprise
Architecture
(IndEA)
25
Provides a generic
framework comprising
of a set of architecture
reference models, which
can be converted into
a Whole-of-Government
Architecture
Ministry of Electronics
and IT (MeitY)
Used by Central
Ministries, State
Governments,
Government Agencies
and Public Sector
Enterprises who
wish to re-architect
their enterprises for
integrated delivery of
digital services
National Career
Service (NCS)
26
Digital platform
providing employment-
related services,
integrated with 28
State/UT portals
Ministry of Labour
and Employment, 28
States/UTs
Unified job search
and career counselling
services across multiple
states
CASE STUDY: NATIONAL BEST PRACTICES
1. Telangana’s TG-iPASS
Background: Before 2014, industrial approvals in Telangana (as in most Indian states)
were plagued by bureaucratic delays, procedural delays, and lack of coordination among
departments. Entrepreneurs had to visit multiple government offices, submit the same
information repeatedly, and wait for months to receive clearances. This inefficiency was a
major bottleneck in attracting investments and promoting industrial growth in the newly
formed state.
Solution: To address these challenges, the Government of Telangana enacted the TG-
iPASS (Telangana Industrial Project Approval and Self-Certification System) Act, 2014,
establishing a single-window, time-bound, and transparent clearance system for industrial
projects.
23 https://pib.gov.in/PressReleasePage.aspx?PRID=2003463
24 https://pib.gov.in/PressNoteDetails.aspx?NoteId=150545&ModuleId=3®=3&lang=1
25 https://egovstandards.gov.in/sites/default/files/2021-10/IndEA%20Framework%20V%201.0.pdf
26 https://www.pib.gov.in/PressReleasePage.aspx?PRID=1989161 Achieving Efqciencies in MSME Sector through Convergence of Schemes 19
Key features of the system include:
1 day to 30 days of approval time frame depending upon on the complexity of
the approval.
Making mandatory for the Competent Authorities to seek shortfall/additional
information required, only once, within three days from receipt of the application.
Empowering Entrepreneurs with Right to clearances to know the reasons for delay
in getting the clearance within time limits.
Penalties for officers who delay clearances beyond stipulated time.
Enabling Infrastructure: TG-iPASS integrates over 25 departments onto one digital platform
where investors can apply for all approvals simultaneously. The system supports real-time
data exchange among departments (Pollution Control, Urban Development, Fire, Power,
etc.) reducing paperwork and delays. Investors can track application status online, ensuring
transparency. Built-in escalation and resolution systems enhance investor confidence.
Impact: As of FY 2022-23, TG-iPass has approved `26,791 crore worth of investments in
3,191 new industrial projects. Cumulatively TG-iPASS has attracted 22,745 industries so far,
investments of Rs. 2,60,060 Crs. and created employment for 17.54 lakhs people
27
.
CASE STUDY: INTERNATIONAL BEST PRACTICES
1. Estonia’s “Once Only” Principle
Background: Estonia, a small Baltic nation with a population of 1.3 million, is globally recognized for its digital governance leadership. In 1990s, Estonia adopted a “digital- first” approach to build efficient, citizen-centric public services. A cornerstone of this transformation is the “Once Only” Principle.
Before the implementation of digital governance, citizens had to:
Submit the same personal information (e.g., name, address, income) to multiple
government departments repeatedly.
Deal with long queues, paperwork, and delays in services such as healthcare, tax,
business registration, and education.
Face a lack of coordination between government agencies, leading to inefficiencies
and duplication of efforts.
Solution: In the early 2000s, Estonia incorporated the “Once Only” Principle into its legal
framework, which mandates that the state cannot ask citizens for the same information
more than once
28
. Instead, government departments must retrieve the required data from
existing databases, with appropriate consent and secure access.
27 Invest Telangana Annual Report (2022-23) https://invest.telangana.gov.in/wp-content/uploads/2023/06/ Final-Annual-Report-2003_A4_compressed.pdf%20Annual%20Report%202022-23
28 https://economy-finance.ec.europa.eu/document/download/2ec579de-624a-4f48-961d-3c3994fc75c1_
en?filename=digital_identity_once-only-principle_and_reducing_administrative_burden.pdf&prefLang=ga
Other International Best Practices:
Germany’s Einheitlicher Ansprechpartner (EA): It is a digital one-stop shop
designed to simplify administrative procedures for businesses, particularly in line with the EU Services Directive. The platform integrates services from state and local authorities, enabling users to submit applications, upload documents, and track the real-time status of permits and licenses.
Australia’s Business Registration Service (BRS): An online platform that
simplifies the process of starting a business by integrating the registration
of key business identifiers such as the Australian Business Number (ABN),
Goods and Services Tax (GST), and business names. The platform provides a
step-by-step guided experience through a user-friendly interface, significantly
reducing complexity for new entrepreneurs. It also offers real-time status
updates, enhancing transparency and user confidence, while its mobile-friendly
design ensures accessibility for users on the go. Achieving Efqciencies in MSME Sector through Convergence of Schemes 20
Enabling Infrastructure: X-Road is Estonia’s secure data exchange layer that connects
over 1,000 public and private sector organizations. It allows decentralized databases (tax,
health, police, education, etc.) to communicate securely and in real time. Citizens can
access and control their data through the e-Estonia portal, and can see who accessed
their information and why
29
.
2. Canada’s BizPaL
Fig 3.1: Canada’s BizPal Interface
Background: In Canada, starting or expanding a business often required navigating a
fragmented system involving federal, provincial/territorial, and municipal authorities, each with its own set of permits and licenses. This created confusion, duplication of efforts, and delays, especially for small and medium enterprises (SMEs). To address this challenge and streamline business compliance, Canada’s Innovation, Science and Economic Development (ISED) launched BizPaL (Business Permits and Licences).
Solution: BizPaL
30
is an online portal that consolidates regulatory requirements from all
levels of government, helping entrepreneurs identify and apply for necessary permits and
licenses quickly and accurately.
Key features of the portal include:
Personalized Application: Users receive a customized list of required permits based
on inputs like business type, location, and operations.
Step-by-Step Guidance: The platform walks users through compliance in an easy-
to-understand manner.
Cross-Government Coverage: It integrates federal, provincial/territorial, and
municipal regulations.
29 https://e-estonia.com/interoperability-as-the-meeting-point-for-a-digital-nordic-league
30 https://bizpal.ca/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 21
Enabling Infrastructure: Managed by ISED in collaboration with 600+ participating
jurisdictions across Canada. Close coordination between ISED and local governments
ensures up-to-date and jurisdiction-specific content. There are common templates and
information protocols which ensures that data from multiple government tiers is aligned.
The portal is cloud-based, multilingual (English/French), and designed to support a wide
range of business types and regulatory variations.
3. Singapore’s GoBusiness Licensing Portal
Background: Singapore has recognized as one of the most business-friendly countries
in the world. However, entrepreneurs previously faced delays in licensing, requiring interactions with multiple government agencies for approvals. Each agency had its own forms, portals, and timelines, creating redundant data submissions, confusion, and delays, especially for startups and SMEs. In response, the Government of Singapore launched
the GoBusiness Licensing Portal as part of its Smart Nation strategy, to centralize and streamline all business-facing regulatory processes.
Fig 3.2: Singapore’s GoBusiness Licensing Portal Interface
Solution: Launched in 2019, the GoBusiness Licensing Portal
31
is a single digital gateway
that integrates licensing, registration, and advisory services across agencies. It offers:
License Recommendation Engine: Users input business type, activities, and location,
then the system suggests only the relevant licenses.
Integrated Application System: Businesses apply for multiple licenses from over
40 agencies via a single unified interface.
Guided Journeys: Step-by-step workflows for business setup, expansion, and
closure.
One-Stop Access: Includes tools for applying for grants, checking permit status,
and accessing business support schemes.
31 https://www.gobusiness.gov.sg/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 22
Enabling Infrastructure: Government Technology Agency (GovTech) led the digital design,
ensuring mobile-first, secure, and intuitive user experience. Powered by Singapore’s
National Digital Identity (Singpass) and MyInfo Business, the portal allows data auto-fill
from government records
32
. APIs connect systems from agencies like URA, SFA, NEA,
MOM, and ACRA removing duplication and enabling parallel processing.
BOX 3.1: OTHER INTERNATIONAL BEST PRACTICES
Germany’s Einheitlicher Ansprechpartner (EA): It is a digital one-stop shop
designed to simplify administrative procedures for businesses, particularly in line with the EU Services Directive. The platform integrates services from state and local authorities, enabling users to submit applications, upload documents, and track the real-time status of permits and licenses.
Australia’s Business Registration Service (BRS): An online platform that simplifies
the process of starting a business by integrating the registration of key business
identifiers such as the Australian Business Number (ABN), Goods and Services
Tax (GST), and business names. The platform provides a step-by-step guided
experience through a user-friendly interface, significantly reducing complexity for
new entrepreneurs. It also offers real-time status updates, enhancing transparency
and user confidence, while its mobile-friendly design ensures accessibility for users
on the go.
European Union Multi-Level Governance for Environmental Compliance: EU’s
multi-level governance approach aims to align national environmental policies
with EU-wide standards. This model requires member states to share data and
coordinate policy at local, national, and EU levels, leading to a harmonized
regulatory approach across countries. The program underscores how international
frameworks can guide national systems to converge effectively, promoting both
compliance and collaborative problem-solving.
3.2.2 Best Practices for Process Convergence
1. Merger of Similar Schemes:
Under this approach, government agencies identify and combine government schemes
with overlapping objectives or target beneficiaries. By merging similar schemes,
redundancy is minimized, allowing for more efficient use of resources and reducing
administrative overhead. This consolidation leads to improved service delivery, better
coordination, and a greater impact on the intended beneficiaries.
32 https://www.tech.gov.sg/products-and-services/for-businesses/corporate-transactions/gobusiness/
Other International Best Practices:
European Union Multi-Level Governance for Environmental Compliance:
EU’s multi-level governance approach aims to align national environmental
policies with EU-wide standards. This model requires member states to share
data and coordinate policy at local, national, and EU levels, leading to a
harmonized regulatory approach across countries. The program underscores
how international frameworks can guide national systems to converge
effectively, promoting both compliance and collaborative problem-solving. Achieving Efqciencies in MSME Sector through Convergence of Schemes 23
Some of the past examples of such merger are:
Table 3.2: Merger of Similar Schemes in the past
Merged SchemeMinistry/OrganisationDetails
Vigyan Dhara
33
Department of Science and
Technology (DST)
Three umbrella schemes, merged into
a unified central sector scheme namely
‘Vigyan Dhara’ of DST. The scheme has
three broad components:
i. Science and Technology (S&T)
Institutional and Human Capacity
Building
ii. Research and Development and
iii. Innovation, Technology Development,
and Deployment.
Pradhan Mantri
Anusuchit Jaati
Abhyuday Yojana
(PM-AJAY)
34
Department of Social Justice
and Empowerment -Unified
scheme for integrated
development of SC-majority
villages.
Combines Pradhan Mantri Adarsh Gram
Yojana (PMAGY) with two other schemes
since FY 2021-22.
2. Merge Similar Components of Schemes:
Involves achieving convergence by combining overlapping components from different
schemes. Instead of managing separate schemes that contain similar elements, these
components can be merged to create a more focused and effective initiative. Some
of the examples are:
Table 3.3: Merger of Similar Components in the past
Example MinistryDescription
Technology
Business
Incubator
(TBI)
35
Ministry of
MSME
The TBI component under the ASPIRE scheme has been discontinued
due to its convergence with the Incubation Scheme of the Ministry of
MSME. However, all TBIs approved until March 31, 2021, will continue
to receive financial assistance for the procurement of plant and
machinery according to the previous guidelines applicable to TBIs.
33 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2048574
34 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1982754
35 https://aspire.msme.gov.in/WriteReadData/DocumentFile/ASPIRE_NEW.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 24
MSME
Champions
Scheme
36
Ministry of
MSME
The MSME Champions scheme was formulated by the Standing
Finance Committee (SFC) by merging all six components of the
erstwhile Technology Upgradation Scheme (TUS). This holistic
approach aims to unify, synergize, and converge various schemes
and interventions toward a single purpose: modernizing processes,
reducing waste, enhancing business competitiveness, and facilitating
national and global reach and excellence for clusters and enterprises.
The MSME Champions scheme includes 3 components:
• MSME- Sustainable (ZED)
• MSME- Competitive (LEAN)
• MSME-Innovative (focused on incubation, intellectual property
rights, design, and digital MSME)
3. Streamlining to Create an Umbrella Scheme:
Streamlining involves consolidating smaller schemes under a larger, comprehensive
“umbrella scheme.” This approach reduces administrative overhead, ensures better
coordination among various initiatives, and provides holistic support to beneficiaries.
By grouping related programs, the government can enhance efficiency and improve
the overall impact of its policies.
Table 3.4: Umbrella Schemes
Example MinistryDescription
Mission Poshan
2.0, Mission
Vatsalya and Mission
Shakti
37
Ministry of
Women
and Child
Development
Based on common themes, all major schemes of
the Ministry have been classified under 3 umbrella
schemes.
National Handloom
Development
Programme
38
Ministry of
Textile
The NHDP has been formulated for the financial years
2021-22 to 2025-26, focusing on the integrated and
holistic development of handlooms and the welfare of
handloom weavers. It includes several components:
A. Small Cluster Development Programme
B. Handloom Marketing Assistance
C. Need-based Special Infrastructure Project
D. Mega Cluster Development Programme
E. Concessional Credit/Weaver MUDRA Scheme
F. Handloom Weavers’ Welfare
G. Other Miscellaneous & Promotional Components
36 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1786356
37 https://pib.gov.in/Pressreleaseshare.aspx?PRID=1703147
38 https://handlooms.nic.in/assets/img/Final%20Revised%20%20Guidelines%20NHDP%2012.04.2023.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 25
4. Collaborative Centre-State Convergence:
Promotes cooperation between central and state governments to align their programs
and schemes. By sharing resources and responsibilities, this model ensures that
initiatives are tailored to local needs while simultaneously meeting national objectives.
There are several examples of this, some of which are given below.
Table 3.5: Collaborative Centre-State Convergence
Example
Ministry /
Organisation
Description
Uttar Pradesh:
Convergence of
One District One
Product (ODOP)
and National
Export Promotion
Programs
39
Ministry of
Commerce
& Industry
(DGFT), State
MSME & Export
Promotion
Department
The UP MSME & Export Promotion Department promotes
district-specific products under ODOP, focusing on
branding, capacity building, and infrastructure. This
scheme is operationally converged with DGFT’s
Districts as Export Hub
40
, enabling ODOP units to
benefit from central export schemes like RoDTEP
and TIES. The result is a unified ecosystem offering
shared marketing, logistics, financial support, and duty
remission -empowering artisans and small producers to
access domestic and international markets.
Tamil Nadu:
Convergence
of State Food
Processing Policy
with Central
Schemes
41
Ministry of Food
Processing
Industries
(MoFPI),
Tamil Nadu
Department
of Agricultural
Marketing &
Agri-Business
(DAM&AB)
The Tamil Nadu Food Processing Policy 2018 identifies
the Department of Agricultural Marketing & Agri-
Business (DAM&AB) as the nodal agency responsible
for implementing food processing initiatives in the
state. A core focus of the policy is to facilitate
convergence between state-level support and central
government schemes such as the Pradhan Mantri Kisan
SAMPADA Yojana (PMKSY), PMFME, and schemes
from MSME, National Horticulture Board (NHB), and
National Horticulture Mission (NHM). Through this
convergence, the state enables start-ups, MSMEs,
and agro-entrepreneurs to access capital subsidies,
infrastructure support, and market linkages across both
levels of government. The approach encourages the
leveraging of dual funding for eligible food processing
units and promotes the use of shared infrastructure
such as common processing centres, cold chains, and
food parks.
Andhra Pradesh:
Convergence
of Electronics
Promotion Policy
and National
Programs
Ministry of
Electronics and
IT (MeitY), State
IT & Electronics
Department
The state’s electronics manufacturing policy offers
capital subsidies, power incentives, and interest rebates,
which are designed to stack with central schemes like
the PLI for Electronics and initiatives under Make in
India and Digital India.
39 https://odopup.in/en/page/introduction
40 https://www.pib.gov.in/PressReleasePage.aspx?PRID=1897408&utm
41 https://cms.tn.gov.in/cms_migrated/document/GO/agri_e_ms_272_am3_2018.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 26
5. Inter-ministerial Convergence:
Involves different ministries collaborating to achieve shared goals, breaking down silos
that often hinder effective governance. By pooling expertise, funding, and resources,
this approach addresses issues that span multiple domains, such as rural development
or social welfare.
There are several examples of collaborative Centre-State and Inter-ministerial Convergence.
Some of which are given below.
Table 3.6: Inter-ministerial convergence
ExampleMinistryDescription
Convergence
Between Mahatma
Gandhi NREGA
42
and
(i) Catalytic
Development
Programme
(ii) Rubber Board
Ministry of
Textiles,
Ministry of Rural
Development
(MoRD)
Ministry of
Commerce &
Industry,
Ministry of Rural
Development
(MoRD)
Sericulture in India, supported by the Central Silk
Board under the Ministry of Textiles, is a major
rural livelihood activity generating employment
for 7.5 million people. The sector benefits from
convergence between MGNREGA and the Ministry’s
Catalytic Development Programme, enabling better
resource utilization, transparency, and local need-
based planning through Panchayati Raj Institutions.
This synergy enhances rural development, women’s
empowerment, and economic equity.
The Rubber Board, under the Ministry of Commerce
& Industry, supports sustainable rural livelihoods
through rubber plantations via two key schemes,
Rubber Plantation Development Scheme (RPD) and
Rubber Development in North East (RDNE). These
schemes provide early-stage support, skill building,
value addition, and market linkages. A convergence
framework with MGNREGA has been introduced to
leverage labour and resources for rubber cultivation,
ensuring long-term income and market access for
rural communities.
42 https://nrega.nic.in/MGNREGA_new/convergence.aspx Achieving Efqciencies in MSME Sector through Convergence of Schemes 27
ExampleMinistryDescription
(iii) Horticulture
Department
Ministry of
Agriculture &
Farmers’ Welfare
(MoA&FW),
Ministry of Rural
Development
(MoRD)
The Horticulture Department under the Ministry of
Agriculture & Farmers’ Welfare (MoA&FW) promotes
convergence with MGNREGA (Ministry of Rural
Development) to enhance nutrition, income, and
livelihoods through horticulture. Convergence is
planned under the Mission for Integrated Development
of Horticulture (MIDH) and National Horticulture
Mission (NHM), with training support extended to
officials and community resource persons under
NRLM.
Ministry of Railways
and MGNREGA
Convergence for
Infrastructure
Development
43
Ministry of
Railways,
Ministry of Rural
Development
(MoRD)
Collaboration focuses on developing rural
infrastructure, including approach roads, level
crossings, and rail embankment maintenance.
MGNREGA provides unskilled labour, while the
Ministry of Railways provides technical expertise and
top-up payments. This improves connectivity and
reduces logistical barriers for MSMEs.
Departments of
Women & Child
Development
(DWCD) and Health
& Family Welfare
(DHFW)
44
Ministry of Health
& Family Welfare
(DHFW)
The convergence framework between the DoHFW
and DWCD under the National Health Mission involves
coordinated service delivery at the grassroots level,
particularly through platforms like Village Health and
Nutrition Days (VHNDs). It ensures collaboration in
service provision, joint training of frontline workers
(AWWs, ASHAs, ANMs), shared monitoring tools,
and integrated planning for maternal and child health,
nutrition, and family welfare programs.
PM Vishwakarma
45
Ministry of Micro,
Small & Medium
Enterprises
(MoMSME),
Ministry of Skill
Development &
Entrepreneurship
(MSDE),
Department of
Financial Services
(DFS), Ministry of
Finance
Launched on 17 September 2023 by the Government
of India, PM Vishwakarma is a flagship initiative aimed
at supporting traditional artisans and craftspeople
engaged in 18 trades such as carpentry, blacksmithing,
pottery, etc. It offers formal recognition through a
PM Vishwakarma certificate and ID, skill training with
stipends, a toolkit incentive of `15,000, and collateral-
free credit up to `3 lakh at a concessional interest
rate of 5%, with credit guarantees supported by
CGTMSE. By combining skilling, financial access, and
market linkages, PM Vishwakarma serves as a model
for inter-ministerial convergence to empower India’s
traditional workforce.
Case Study: National Best Practices
43 https://nrega.nic.in/MGNREGA_new/convergence.aspx#:~:text=Ministry%20of%20Railways,of%20the%20
works%20in%20convergence.&text=Protection%20work%20of%20existing%20railway%20embankment/
cutting/bridges.
44 https://nhm.gov.in/index1.php?lang=1&level=2&sublinkid=1084&lid=149
45 https://pmvishwakarma.gov.in/cdn/MiscFiles/eng_v30.0_PM_Vishwakarma_Guidelines_final.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 28
CASE STUDY: NATIONAL BEST PRACTICES
1. Maharashtra: Convergence of MSE-CDP and State Industrial Cluster
Development Program
Background: The Government of Maharashtra and the Ministry of MSME, Government
of India, initiated programs to support cluster development in Maharashtra. At the
central level, the Micro & Small Enterprises – Cluster Development Programme
(MSE-CDP) was introduced to assist in the creation of Common Facility Centres
(CFCs) and infrastructure support. Simultaneously, Maharashtra had its own State
Industrial Cluster Development Program, focused on strengthening traditional and
emerging industrial clusters.
Fig 3.3: Maharashtra State Enterprises-Cluster Development Programme
Solution: The Government of Maharashtra adopted a convergence strategy by aligning
its State Cluster Development Program with the centrally sponsored MSE-CDP
46
. This
dual-level approach ensured shared responsibilities, pooled funding, and synchronized
implementation. The convergence enhances productivity, reduces operational costs, and
boosts MSME competitiveness by creating modern cluster-level infrastructure and facilities.
The state’s Directorate of Industries plays a pivotal role, in collaboration with the Ministry of
MSME, through its Special Purpose Vehicle (SPV) model which serves as the implementing
entity. Operating under a Public-Private Partnership (PPP) model, SPVs are responsible
for the establishment and operation of Common Facility Centres (CFCs). These CFCs
cater to the shared needs of cluster units by offering Research and Development (R&D)
support, Product testing and quality certification, Common processing facilities, Packaging
and branding services.
46 https://www.doingbusinessinmaharashtra.org/MSE-CDP.php Achieving Efqciencies in MSME Sector through Convergence of Schemes 29
Under the MSE-CDP framework:
Up to 70% of project cost is funded by the Ministry of MSME for CFCs.
60% assistance is available for infrastructure development projects like roads,
power distribution, and water supply.
The remaining cost is shared between the State Government and the SPV (cluster
stakeholders).
By synchronizing the state’s financial assistance with this central funding, Maharashtra
enables clusters to leverage dual benefits, thereby reducing the financial burden
on individual enterprises.
Cluster Identification and Project Development
The Directorate of Industries, Government of Maharashtra, plays a pivotal role in:
Identifying potential clusters based on sectoral strength and needs
Conducting diagnostic studies and preparing Detailed Project Reports (DPRs)
Coordinating with the Ministry of MSME for approvals and fund release
Impact: More than 12,000 small-scale industries across multiple sectors have directly
benefited from the converged scheme implementation. Clusters have witnessed reduced
production costs due to shared machinery and infrastructure, improved product quality
and market competitiveness, enhanced access to export markets through better branding
and certification, the converged program has promoted inclusive industrial growth in both
developed and backward regions of Maharashtra.
2. Raising and Accelerating MSME Performance (RAMP)
Background: To overcome challenges like limited access to finance, inadequate market
linkages, low productivity, and fragmented support mechanisms across states and ministries the Government of India, the Ministry of MSME with support from the World Bank, launched the RAMP (Raising and Accelerating MSME Performance) program in 2022, with a total outlay of `6,062 crore (USD 808 million)
47
.
Solution: RAMP aims to transform the MSME ecosystem by addressing systemic constraints through:
Improved access to markets and credit
Technology adoption and green practices
Better Centre-State policy coordination
Institutional capacity-building
It incentivizes states to develop their Strategic Investment Plans (SIPs) for MSME development, which are then evaluated and co-funded by the central government through the Ministry of MSME.
47 https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1844602 Achieving Efqciencies in MSME Sector through Convergence of Schemes 30
Enabling Infrastructure: Governed by National Steering Committee under Secretary (MSME).
Credit Monitoring Committee involves members from MoMSME, Ministry of Finance, RBI,
SIDBI, CGTMSE. SIPs are submitted by State MSME Departments with detailed policy
actions, capacity-building plans, and cluster strategies. Promotes use of Udyam Portal,
MSME Champions platform, and Trade Receivables Discounting System (TReDS).
CASE STUDY: INTERNATIONAL BEST PRACTICES
1. United Kingdom’s Universal Credit
Background: Before 2013, the UK welfare system was fragmented across six major income-
related benefits: Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support, Working Tax Credit, Child Tax Credit, and Housing Benefit. These were administered separately by various departments (DWP, HMRC, local authorities), causing inefficiencies, duplication, and confusion for claimants.
Solution: Universal Credit
48
replaced these six benefits with a single, consolidated monthly
payment based on individual circumstances. The system merges functions, eligibility
checks, and payment mechanisms into a unified digital service.
Key features include:
Unified eligibility and application: One integrated claim for all income-related
support.
Real-time income updates: Links with HMRC Real-Time Information (RTI) enable
automatic earnings assessment.
Single taper and conditionality: A consistent withdrawal rate applied as income
increases, with standardized conditionality and sanctions.
Enabling Infrastructure: A single portal for applications, updates, and interactions.
Integration with HMRC (for income), Department for Work and Pensions (DWP), Jobcentre
Plus, and local authorities. This Eliminated manual eligibility checks and legacy-enforcement
errors. Legislation under Welfare Reform Act 2012 enabled seamless merging of schemes
and regulatory coherence.
2. Australia - Regional Rail Revival
Background: Regional Victoria’s rail network suffered from decades of underinvestment and fragmented oversight. Pre-2017, rail upgrades were managed separately by state and federal agencies, resulting in disjointed planning, delays, and inefficiencies in improving regional transport infrastructure
49
.
Solution: Launched in 2017, Regional Rail Revival is a large-scale, joint federal state infrastructure initiative aimed at upgrading Victoria’s regional rail lines. It merges multiple rail upgrade projects (including Regional Fast Rail and Regional Network Development) into a unified program with clear objectives and streamlined execution.
48 Policy paper Government Transformation Strategy appendix: case studies (2017)
49 https://www.audit.vic.gov.au//report/freight-outcomes-regional-rail-upgrades Achieving Efqciencies in MSME Sector through Convergence of Schemes 31
Key features:
Unified project framework covering track, signaling, station, and level crossing
improvements.
Joint funding model: Primarily funded by the Australian Government, with the
Victorian State Government as a co-investor.
Delivery managed under a single governance entity - Rail Projects Victoria -
ensuring integrated planning, procurement, and implementation.
Enabling Infrastructure: A bilateral agreement defines roles, responsibilities, and financial
contributions between federal and state governments. Rail Projects Victoria provides
oversight, procurement, and program coordination. Shared standards, timetables, and
quality controls ensure consistent execution across multiple rail corridors.
The examples and case studies explored in this chapter demonstrate how convergence, whether through information systems, inter-ministerial collaboration, or centre-state partnerships, can significantly enhance the efficiency, outreach, and impact of MSME support mechanisms. By breaking silos and aligning efforts across government levels and departments, convergence creates a more responsive and streamlined policy ecosystem. In the next chapter, the existing MSME schemes are analysed, drawing out their commonalities, distinct features, and on-ground insights gathered through stakeholder consultations, to better understand what enables or hinders effective delivery. 04
INSIGHTS ON
CONVERGENCE
OPPORTUNITIES Achieving Efqciencies in MSME Sector through Convergence of Schemes 34
4.1. METHODOLOGY
This study identifies convergence opportunities within Ministry of MSME (MoMSME)
schemes through:
i. Secondary Research
ii. Stakeholder Consultation Workshops
The premise for consulting the stakeholders was set by analysing the schemes. From these scheme guidelines certain similarities emerged, basis which an implementation framework and convergence model was created.
The series of six stakeholder consultation workshops included representatives from
industry associations, government officials, bankers, and enterprises. A stratified sampling
method was used to ensure that all key strata, including industry sectors and regions,
were adequately represented. Six FGDs conducted between June to September 2024:
Table 4.1: Details of Six workshops
Workshop
Location
Sectors
1 2 3 4 5 6
Mumbai,
Maharashtra
Textiles Pharma Chemicals Automobile Engineering Leather
Lucknow,
UP
Food
Products
Hosiery and
Garments
Metal
Products
Cotton
textiles
Ceramics
Wool, Silk,
Synthetic
Fibre
Textiles Achieving Efqciencies in MSME Sector through Convergence of Schemes 35
Chennai, TN Coir Automobile
Food
Processing
Textiles
Leather &
Footwear
Precision
Engineering
Tiruppur, TN Coir Automobile
Food
Processing
Textiles
Leather &
Footwear
Precision
Engineering
Guntur, AP
Pharma
& Life
Science
Defence and
Precision
Engineering
Electronics
Food
Products
IT Services -
Hyderabad,
TS
Pharma
& Life
Science
Defence and
Precision
Engineering
Electronics
Food
Products
IT Services -
Additionally, a series of Focus Group Discussions (FGDs) were also conducted with key
stakeholders, including MSME Secretary and other senior officials from the Ministry of MSME
and representatives from the banking sector. A total of 98 stakeholders were consulted
throughout the study to help refine the proposed convergence recommendations.
Table 4.2 Details of FGDs with MoMSME and Bankers
Focussed Group Discussions during August– September 2024
Focussed GroupLocation Participants
Ministry of MSME New Delhi
Secretary
Additional Secretary & Development Commissioner
Additional Development Commissioner
Joint Development Commissioner
Joint Secretary
Joint Director
Deputy Director
Bankers Virtual
General Manager - Bank of Baroda
General Manager - SIDBI
General Manager - State Bank of India
General Manager - Canara Bank
Quantitative inputs on the following parameters were captured:
Awareness & Accessibility of Schemes
Level of awareness among beneficiaries about various government schemes.
Sources of information used by MSMEs to learn about schemes.
Ease of access to scheme-related guidelines and application procedures.
Reasons for non-participation in available schemes. Achieving Efqciencies in MSME Sector through Convergence of Schemes 36
Challenges & Barriers in Scheme Utilization
Common hurdles faced in the application and approval process.
Procedural and documentation challenges affecting scheme uptake.
Time taken from application to fund disbursement.
Percentage of applicants who abandoned the process due to complexity.
Duplicity & Convergence of Schemes
Extent of overlap between different schemes offering similar benefits.
Cases of MSMEs availing multiple schemes for the same purpose.
Challenges in navigating multiple schemes simultaneously.
Role of different departments/institutions in guiding beneficiaries toward the right
schemes.
Need and demand for a single-window system for MSME schemes.
4.2. MINISTRY OF MSME SCHEMES: SIMILARITIES AND
UNIQUENESS
To support and nurture the MSME sector, the Ministry of MSME implements 18 schemes
focused on addressing key challenges related to credit access, infrastructure development,
technology adoption, innovation, and market expansion. This section provides a detailed
review of these schemes, highlighting their core objectives, areas of intervention, and
target beneficiaries. It also examines overlaps and complementarities across schemes,
identifying both unique features and areas of convergence that can inform streamlined
policy implementation.
The Prime Minister’s Employment Generation Programme (PMEGP) is a central sector
scheme, administered by the Ministry of Micro, Small, and Medium Enterprises (MoMSME).
It was created by merging two earlier schemes: Prime Minister’s Rojgar Yojana (PMRY)
and Rural Employment Generation Programme (REGP). Under the Scheme, Margin Money
(Subsidy) is provided to individuals availing loan from banks for setting up new enterprises.
Since inception of the scheme from FY 2008-09, more than 9.65 lakh micro enterprises
have been assisted across the country with a Margin Money (MM) subsidy of more than
Rs. 25,263.33 Crore providing estimated employment to 78.84 lakh persons
50
.
50 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2035100) Achieving Efqciencies in MSME Sector through Convergence of Schemes 37
0.00
1,000.00
2,000.00
3,000.00
4,000.00
2019-20 2020-21 2021-222 022-23 2023-24
PMEGP Target Vs Achieved (Disbursement)
Margin Money to be utilized. (Rs. Cr.)
Margin money subsidy utilized (Rs Cr.)
Figure 4.1: PMEGP Target Vs Achieved (Disbursement)
Table 4.3: PMEGP Snapshot
1. Prime Minister’s Employment Generation Programme (PMEGP)
Components
Credit Assistance: Financial support is provided as a
combination of beneficiary contribution, bank credit,
and government subsidy.
Skill Development: Reputed NGOs, SHGs, and
institutions provide entrepreneurship development
training to beneficiaries.
Quantum of Assistance2025-26 (BE) (in crores)
Beneficiaries are required to contribute
5-10% of the project cost, based on their
category.
Subsidy for General Category: 15%
(Urban), 25% (Rural)
Subsidy for Special Category: 25%
(Urban), 35% (Rural)
Rs. 2954.42 Cr.
51
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust
established by the Government of India and SIDBI; it implements and manages the Credit
Guarantee Scheme for Micro and Small Enterprises (CGSMSE) which is a scheme to provide
collateral-free credit to MSEs. CGTMSE is the implementing body, while CGSMSE is the
financial scheme providing guarantees. CGSMSE provides collateral-free credit support
to Micro and Small Enterprises (MSEs) through a credit guarantee for loans extended by
Member Lending Institutions like banks, financial institutions, and Non-Banking Financial
Companies (NBFCs). Since its inception, the CGSMSE scheme has successfully provided
51 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 38
credit guarantee coverage to over 67 lakh beneficiaries across more than 100 industrial
sectors. The cumulative guarantee amount sanctioned under all schemes reached `4,24,597
crore as of March 2023, with a total of 1,10,83,693 guarantees approved
52
. The scheme
was provided with an additional corpus support of `9,000 crore in the Union Budget for
FY 2023-24
53
to revamp its Scheme to provide guarantee for additional `2 lakh crore to
Micro & Small Enterprises.
Table 4.4: CGTMSE Snapshot
2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Components
Credit Assistance: Financial support is provided as a combination of beneficiary
contribution, bank credit, and government subsidy.
Quantum of AssistanceBudget
Micro Enterprises: Up to 85% coverage for loans up to
`5 lakh, and 75% for loans above `5 lakh and up to `500
lakh. Micro and Small Enterprises (MSEs) in North East
Region and other Special Categories: 80%-85% coverage
depending on the borrower profile and credit amount. All
other MSE borrowers: 75% coverage.
The scheme is being revamped as
the approved corpus of
`9,000
crore has already been achieved.
54
The Self-Reliant India (SRI) Fund is a Fund of Funds (FoF) initiative launched by the
Government of India in 2020 as part of the Aatmanirbhar Bharat package. Managed by
NSIC Venture Capital Fund Limited (NVCFL), a subsidiary of the National Small Industries
Corporation (NSIC), the SRI Fund aims to provide equity capital rather than loans to MSMEs.
The scheme involves investing in daughter funds managed by professional investment
firms, which in turn, provide growth capital to promising MSMEs. The total provision of
the fund is Rs. 50,000 crores, with Rs. 10,000 crores from the Government of India and
Rs. 40,000 crores through Private Equity/Venture Capital Funds
55
. Till June 2024, total
53 Daughter Funds have been empanelled by way of investing more than Rs. 8,353 crore,
and 450 potential MSMEs have been assisted
56
.
Table 4.5: SRI Fund Snapshot
3. Self-Reliant India (SRI) Fund
Components
Credit Assistance: To boost equity or equity-like
financing for MSMEs.
Quantum of Assistance2025-26 (BE) (in crores)
Equity and Quasi-Equity Financing for MSMEs Rs. 700 Cr.
57
52 Press Information Bureau (https://pib.gov.in/PressReleasePage.aspx?PRID=1982308)
53 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1920289)
54 Source: https://msme.gov.in/sites/default/files/FINALMSMEANNUALREPORT2023-24ENGLISH.pdf
55 Press Information Bureau (https://pib.gov.in/PressReleseDetailm.aspx?PRID=1943193®=3&lang=1)
56 Press Information Bureau (https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2041681®=3&lang=1)
57 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 39
The Procurement and Marketing Support (PMS) Scheme was launched to enhance the
marketability and competitiveness of Micro and Small Enterprises (MSEs) in domestic
and international markets. The scheme aims to support the marketing activities of MSEs,
helping them explore and access new markets.
Table 4.6: PMS Snapshot
4. Procurement and Marketing Support (PMS) Scheme
Components
Marketing Assistance: Promoting Domestic & International Market Access for MSEs.
Capacity Building: Vendor Development Program consisting of training on various
aspects related to Government e-Marketplace (GeM) and exhibition of products.
Quantum of Assistance
2025-26 (BE)
(in crores)
Market Access Initiative: 80% of space rent charges for general
category MSEs and 100% for Special Category
Capacity Building: 80% reimbursement for adoption of bar code,
Adoption of Modern Packaging Techniques, Financial assistance
on annual membership fee for adoption of E-Commerce Platform
Development of Retail Outlet: Rs. 30 lakh max per outlet in Metro &
A class cities and Rs. 20 lakh max per outlets for other cities
Rs. 65 Cr.
58
International Cooperation Scheme promotes international marketing opportunities to
MSMEs by providing financial assistance on reimbursement basis for airfare, space rent,
freight charges, advertisement & publicity charges, entry/registration fee, registration-cum-
membership certificate charge/fee, export insurance premium. Till 2023-24, Rs. 19,57,533
was released to 300 MSMEs
59
in form of support for trade fairs, buyer-seller meets, etc.
Table 4.7: International Cooperation Snapshot
5. International Cooperation Scheme
Components
Marketing Assistance: Promoting International Market Access for MSMEs.
Capacity Building: Capacity Building of First Time MSE Exporters (CBFTE).
Quantum of Assistance
2025-26 (BE)
(in crores)
Participation in international exhibitions/trade fairs and buyer-seller
meets: Up to 100% of the airfare and space rent for MSME delegations.
International conferences and seminars and Business delegations:
75% of the cost of air travel for MSME representatives and up to 75%
of the registration fees.
Rs. 27 Cr.
60
,
61
58 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
59 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1987719)
60 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
61 SPIC Budget Achieving Efqciencies in MSME Sector through Convergence of Schemes 40
Table 4.8: Similarities and Uniqueness of Procurement and
Marketing Scheme & International Cooperation Scheme
Procurement and Marketing
Support
International Cooperation Scheme
Assistance to MSMEs
Facilitate international market
access
Facilitate international market access
Capacity buildingCapacity building
Organizing and participating in
International trade fairs/exhibitions
Organizing and participating in International
trade fairs/exhibitions
Domestic marketing assistanceX
X
Export Insurance, Registration-cum-Membership
Certificate (RCMC) fee for first-time exporters
XTesting & Quality Certification fee assistance
A Scheme for Promotion of Innovation, Rural Industries & Entrepreneurship (ASPIRE)’s
main objective is promoting entrepreneurship and employment generation in agro-rural
sector with special focus on rural and underserved areas. During 2023, 5 new Alternative
Investment Funds (AIFs), were supported with a commitment of Rs. 145 crores taking the
total commitment to Rs.217.50 crore to 11 AIFs, out of the total corpus of Rs. 310 crores
62
.
Four new Livelihood Business Incubator (LBIs) were approved and 25,468 beneficiaries
were trained, out of which 1,458 were wage employed. 225 micro-enterprises were
established via the incubation programs conducted in the LBIs
63
.
Table 4.9: ASPIRE Snapshot
6. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
Components
Innovation: Livelihood Business Incubator (LBI): An entity set up for
imparting skill development and incubation programs
Credit Assistance: FoF - Invest through Alternate Investment Funds
(AIFs), in early-stage scalable start-ups in need of support and nurturing
to succeed in developing technology
Quantum of Assistance
2025-26 (BE)
(in crores)
Setting up LBIs: One-time grant of 100% of cost of Plant & Machinery
other than the land and infrastructure or an amount up to 1NR 100
Iakh, whichever is less to be provided.
Rs. 20 Cr.
64
62 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1992842)
63 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1992842)
64 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 41
MSME Champions scheme has been formulated through Standing Finance Committee
(SFC) by merging all 6 components of Technology Upgradation Scheme (TUS). The end
objective is to pick up clusters and enterprises and modernize their processes, reduce
wastages, sharpen business competitiveness and facilitate their National and Global reach
and excellence. There are 3 components under the new MSME Champions scheme, the
details of which are as below:
1. MSME-Sustainable (ZED) - to create awareness amongst MSMEs about Zero
Defect Zero Effect (ZED) practices and motivate and incentivize them for ZED
Certification
2. MSME-Competitive (Lean) - for enhancing the competitiveness of MSME Sectors
through implementation of Lean Tools and Techniques. Lean Tools and Techniques
are a tested and proven methodology for improving the competitiveness of
MSME sector.
3. MSME-Innovative (for Incubation, IPR, Design and Digital MSME) - a combination
of innovation in incubation, design intervention and by protecting IPR in a single
mode approach to create awareness amongst MSMEs about India’s innovation
The Digital MSME will be interlinked with all the other components of the MSME Champions
Scheme.
Table 4.10: MSME Champions Snapshot
7. MSME Champions
Components
Technology Upgradation: This is an umbrella scheme incentivizing MSMEs
to reduce wastage, improve competitiveness, integrate digitalization, offer
incubation support for innovative ideas.
Quantum of Assistance
2025-26 (BE)
(in crores)
Subsidy on cost of ZED certification – 80/60/50% for Micro, Small and
Medium Enterprises.
Financial Assistance to Host Institute for developing and nurturing the ideas
shall be provided up to maximum of Rs. 15 lakh per idea to HI.
90% subsidy on Total Cost of Implementation of Lean Tools and Techniques
at three different levels – Basic, Intermediate, and Advanced.
Rs. 54.72 Cr
65
.
65 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 42
Table 4.11: Similarity between ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)
Similarity
MSME
Innovative
Skill Development: Offers SDI to
entrepreneurs in the MSME sector.
Focus on Tech: Promote technological
advancement and innovation in MSMEs.
Support for incubation and business
development: Providing financial
support to foster innovation
ASPIRE
Special Focus:
Rural Areas
The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched in
2005-06 for making Traditional Industries more productive and competitive by organizing
the Traditional Industries and artisans into clusters to provide support for their long-term
sustainability and economies of scale. The scheme was revamped in 2014-15.
Table 4.12: SFURTI Snapshot
8. Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
Components
Hard Intervention (Infrastructure): Creation of common facility centres, raw
material banks, upgradation of production infrastructure, warehousing facility,
tools and technological upgradation
Soft Intervention (Skill Development): Build general awareness, counselling,
skill development and capacity building, exposure visits, market development
initiatives
Thematic Interventions: Interventions on a cross-cutting basis for brand building,
new media marketing, e-commerce initiatives, research and development
Quantum of Assistance2025-26 (BE) (in crores)
The financial assistance provided for any specific project shall be
subject to a maximum of Rs. 5 (five) crore to support Soft, Hard
and Thematic interventions.
Rs. 362 Cr.
66
Micro and Small Enterprises-Cluster Development Programme (MSE-CDP) was
implemented for the development of clusters across country for creation of tangible
‘assets’ i.e. Common Facility Centres (CFCs) to address the common issues such as
improvement of technology, skills, quality etc. As per a report of Evaluation Study of
MSE-CDP conducted by the National Productivity Council, the scheme has been able
to strengthen and improve the efficiency of the value chain of the units in the cluster
66 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 43
resulting into overall productivity growth of around 10-15% and growth in turnover in the
range of 20-30%
67
.
Table 4.13: MSE-CDP Snapshot
9. Micro and Small Enterprises-Cluster Development Programme (MSE-CDP)
Components
Hard Intervention (Infrastructure): Common facility centres (for testing,
training centre, raw material depot, effluent treatment, complementing
production processes, etc
Soft Intervention (Skill Development): To build capacity of MSEs for
common supportive action through formation of self-help groups,
consortia, upgradation of associations
Quantum of Assistance
2025-26 (BE)
(in crores)
For preparation of Diagnostic Study Report (DSR) - Rs. 2.50 lakhs and
for field organization of Ministry of MSME up to Rs. 1.00 lakh.
For Soft Intervention - 75% of sanctioned amount, with maximum project
cost of Rs. 25 lakh per cluster.
Rs. 410 Cr.
68
Table 4.14: Similarity between MSE-CDP and SFURTI
Implementing AgencyDC-MSME
SFURTISimilarityMSE-CDP
Soft Interventions - Skill Development, Capacity Building,
Exposure Visits, Market Promotion Initiatives
Hard Intervention - Common facility centres, procuring
machinery, providing Raw Material Banks, warehousing,
and training centers
Development of land – Land, roads, drainage, power
distribution in new/existing industrial (multi-product)
areas/estates/Flatted Factory Complex
Focus - Penetrating uncovered districts, aspirational
districts for setting up collectives. Focus on traditional
industries with special focus on endangered art/crafts
NGOs, Institutions of
the Central and State
Governments, PRIs
67 Evaluation Study of MSE-CDP (https://www.dcmsme.gov.in/schemes/Evaluation-Study-of-MSE-CDP-by-
NPC.pdf)
68 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 44
Entrepreneurship and Skill Development Programme (ESDP) was launched by the office
of Development Commissioner Ministry of Micro, Small & Medium Enterprises (O/o DC-
MSME) under “Development of MSMEs” vertical. The objective of the programme is to
motivate young persons to consider self-employment or entrepreneurship as one of the
career options.
Table 4.15: Skill Development Snapshot
10. Entrepreneurship and Skill Development Programme (ESDP)
ComponentsSkill Development
Quantum of Assistance
2025-26 (BE)
(in crores)
Entrepreneurship Awareness Programme (EAP)-One Day training
programme is conducted for Entrepreneurship awareness
Entrepreneurship cum Skill Development Programme(E-SDP) - Six weeks
training programme for Entrepreneurship & Skill Training
Advance E-SDP: The One Week Advance ESDP programmes
Management Development programme (MDP)- One-week training
programme for Management capacity building
Advance MDP: One Week Advance MDP Training Programmes State
Administrative Training Institutes (ATIs)
Rs. 96 Cr.
69
The objective of the Assistance to Training Institutions (ATI) Scheme is to strengthen
capacity for training for Skill Development, entrepreneurship, providing training to staff of
DICs and related Government institutions dealing with MSMEs and strengthening overall
capacity of National Institutions under Ministry of MSME. The assistance is provided to
National level training institutions operating under the Ministry of MSME, namely, National
Institute of Micro, Small, and Medium Enterprises (NI-MSME), KVIC, Coir Board, Tool
Rooms, National Small Industries Corporation (NSIC) & Mahatma Gandhi Institute for
Rural Industrialization (MGIRI) in the form of capital grant for the purpose of creation
and strengthening of infrastructure and support for entrepreneurship development and
skill development training programmes. Assistance is also provided to existing State level
Entrepreneurship Development Institutes (EDIs) for creation or strengthening/ expansion
of their training infrastructure.
Table 4.16: ATI Snapshot
11. Assistance to Training Institutions (ATI)
Components
Skill Development: Establishing Training Institutions/EDIs to train and support
first-generation entrepreneurs
69 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 45
Quantum of Assistance
2025-26 (BE)
(in crores)
Amount of assistance will not exceed the actual amount required
for creation or strengthening/expansion of the infrastructure of the
training institution.
The maximum assistance under the scheme to a State level EDI will
be restricted to Rs. 250 lakhs.
Assistance for skill development programmes is based on the duration
of the National Skills Qualifications Framework (NSQF) compliant
training programmes
Rs. 40 Cr.
70
MoMSME has established 18 Technology Centres (TCs) earlier known as Tool Rooms
(10 Nos) and Technology Development Centres (8 Nos) spread across the country. The
Technology Centres’ primary focus is to support industries particularly MSMEs in the
country through access to advanced manufacturing technologies.
Table 4.17: Technology Centres Snapshot
12. Technology Centres
Components
Technology Upgradation: Establishing Training Institutions/ EDIs to train
and support first-generation entrepreneurs
Quantum of Assistance2025-26 (BE) (in crores)
Technological, Incubation and business advisory support to
MSMEs and skilling services to the employed/unemployed skill
seekers. Direct and indirect employment generation.
Rs. 160 Cr.
71
,
72
Promotion of MSME in NER is envisaged to provide financial support for enhancing the
productivity and competitiveness as well as capacity building of Micro, Small and Medium
Enterprises (MSMEs) in the NER and Sikkim.
Table 4.18: Promotion of MSME in NER Snapshot
13. Promotion of MSME in NER
Components
Technology Upgradation: Creation of common facilities to supplement
manufacturing, testing, packaging, R&D, product and process innovations
and training
Infrastructure Development: Create/ upgrade infrastructural facilities in
the new/existing Industrial Areas including Flatted Factory Complexes for
MSMEs
70 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
71 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
72 Tool Rooms and Technical Institutions Budget Achieving Efqciencies in MSME Sector through Convergence of Schemes 46
Quantum of Assistance
2025-26 (BE)
(in crores)
Technology Upgradation: Financial assistance up to 90% of the
total project cost (maximum Rs.13.5 Cr)
Development of Industrial Estates: Financial assistance up to 90%
of the total project cost (maximum assistance per project shall be
Rs.13.50 Crore for development of New estate and Rs. 9 Crore for
existing Industrial Estate).
Development of Tourism Sector: 90% (maximum assistance Rs.4.50
Cr.).
Rs. 95 Cr.
73
National SC-ST Hub is set up to provide professional support to SC/ST Entrepreneurs to
fulfil the obligations under the Central Government Public Procurement Policy for Micro
and Small Enterprises Order 2012, adopt applicable business practices and leverage the
Stand-Up India initiatives. The objective is to promote “enterprise culture” amongst the
SC / ST population. Various components/interventions have been introduced to cater
the needs of SC-ST MSEs in the areas of finance, technology, market linkages, capacity
building etc. with a view to provide a conducive ecosystem.
Table 4.19: National SC-ST Hub Snapshot
14. National SC-ST Hub
Components
Credit Assistance/ Marketing Assistance/ Skill Development/ Technology
Upgradation: This is an umbrella scheme covering all kinds of support to
SC/ST
Quantum of Assistance
2025-26 (BE)
(in crores)
25% subsidy on institutional finance up to Rs.1 Cr. Subsidy cap of Rs. 25
Lakhs without any sector specific restrictions on technology upgradation
The training cost will be released to training institutes on 50:40:10 pattern
50% as advance amount on approval of training proposal,
40% on training completion and submission of Utilization Certificate and,
10% on submission of outcome report.
The maximum limit on cost of toolkit is Rs. 50,000/- (including GST) per
toolkit per candidate.
The assistance under this scheme will be limited to 80% or Rs. 1,00,000/-
(excluding GST and all other applicable taxes).
Rs. 151 Cr.
74
73 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
74 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 47
Raising and Accelerating MSME Performance (RAMP) is a World Bank supported scheme
launched in 2022. Under the programme, the Centre approves Strategic Investment Plans
(SIPs) for nine states, including Rajasthan, West Bengal, and Gujarat, under the Raising
and Accelerating MSME Performance (RAMP) scheme, with a total funding of Rs 713
crore (US$ 85.49 million), aiming to reduce compliance costs and improve credit access
for micro, small, and medium enterprises. On March 30, 2022, the Indian government
allocated Rs. 6,062.45 crore (US$ 808 million) for the scheme Raising and Accelerating
MSME Performance (RAMP). The programme aims to improve market and credit access,
strengthen institutions and governance at the centre and state levels, improve centre-state
connections and partnerships, resolve late payment difficulties, and green MSMEs. Each
state can design the RAMP Programme as per the need assessment of the state.
Table 4.20: RAMP Snapshot
15. Raising and Accelerating MSME Performance (RAMP)
Components Credit Assistance/Marketing Assistance/Technology Upgradation
Quantum of Assistance
2025-26 (BE)
(in crores)
Promotes Centre-State collaboration by providing grants to States
for preparation of Strategic Investment Plan (SIP), which is a
roadmap developed by the respective State/UT for development of
the MSME sector in the State. RAMP provides grants to States/UTs
for implementing selected projects in the SIP. Since its launch, all
States and UTs (except UT of Delhi) have evinced keen interest in
participating in RAMP.
Rs. 1500 Cr
75
Coir Vikas Yojana (CVY) is an Umbrella Scheme being implemented by Coir Board for
the Development of Coir Industry all over the Country. It was essentially created to help
in transfer of technology for development of skill of coir workers through technological
interventions and integration of various platforms.
Table 4.21: Coir Vikas Yojana Snapshot
16. Coir Vikas Yojana
Components
Technology Upgradation and Infrastructure: To modernize the coir industry by
providing advanced infrastructure
Skill Development: To provide training on sophisticated machinery/ advanced
technology
Marketing Assistance: To promote coir as an eco-friendly natural fibre and
showcase Indian coir products globally.
75 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 48
Quantum of Assistance
2025-26 (BE)
(in crores)
25% of the cost of admissible items of Plant and Machinery procured by
the Coir units. 100% of space rent/airfare, up to Rs. 1.00 lakh or actual rent
paid, whichever is lower. Market Development Assistance (MDA), is set at
10% of the average annual sales turnover of coir products.
Rs. 104.39 Cr.
76
Khadi Gramodyog Vikas Yojana consists of three grants, Khadi Vikas Yojana Grants for
marketing, interest, infrastructure for Khadi Products. Gramodyog Vikas Yojana Grants for
Village Industry sector and Khadi Grant to meet administrative needs.
Table 4.22: Khadi Gramodyog Vikas Yojana Snapshot
17. Khadi Gramodyog Vikas Yojana
Components
Infrastructure: Revival of khadi institutions
Skill Development: Training and Skill Development Programmes
Marketing Assistance: Subsidy on procurement of raw material
Quantum of Assistance2025-26 (BE) (in crores)
Subsidy @ 35% on Prime Cost for Cotton/Muslin, Wool and Polyvastra
and @ 20% on Prime Cost for Silk Khadi
Interest Subsidy - Khadi Institution pay only 4% interest rate. The
difference is borne by the Khadi and Village Industries Council (KVIC)
Financial Assistance for revival of khadi institution with ceiling limit
of Rs.15.00 lakh
Rs. 1065.77 Cr.
77
Launched on 17th November 2023, the PM Vishwakarma Scheme provides holistic support
to artisans and craftspeople, offering recognition, skill enhancement, tool incentives, credit
aid, digital transaction bonuses, and marketing assistance.
Table 4.23: PM Vishwakarma Snapshot
18. PM Vishwakarma
Components
Skill Development: Upgradation of skill of artisans
Credit Assistance: Easy access to collateral free credit
Marketing Assistance: To provide a platform for brand promotion and market
linkages to help them access new opportunities for growth.
76 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
77 Sourcehttps://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 49
Quantum of Assistance
2025-26 (BE)
(in crores)
Basic Training is of 40 hours, over 5-7 days,
Advanced Skill Training of 15 days/ 120 hours or more at designated
Training Centres.
A toolkit incentive of Rs. 15,000 after Skill Verification at the start of
Basic Training.
Loan assistance of Rs. 3,00,000/- wherein, the beneficiaries can avail
the first loan tranche up to Rs. 1,00,000/- and second loan tranche
up to Rs 2,00,000/.
Rs. 5100 Cr.
78
4.3. INSIGHTS FROM STAKEHOLDER CONSULTATIONS
These observations from the secondary research were discussed during stakeholder
consultation workshops to gain practical insights and refine the understanding. The aim
of conducting stakeholder workshops was to validate theoretical findings, gather practical
feedback, and refine the proposed convergence model based on real-world experiences
and challenges. The current shortcomings in the system and key factors that hinder
beneficiaries from effectively accessing the schemes were also discussed.
4.3.1. Need for Improved Awareness of Schemes
Government support is known to have a positive and important impact on the output of
MSMEs
79
, but most MSMEs are not aware of government support available for them. Even when
they are, they hardly avail it
80
. MSMEs in general face the challenge of gathering information
81
about all the schemes, policies, and programmes. Approximately 70% of MSMEs are aware
82
that a variety of government schemes exist, information about eligibility, application,
type of support under the schemes but their usage remains significantly low. For instance,
very few MSMEs avail the benefits of marketing schemes
83
, they are not aware of credit
schemes
84
and special financial privileges given by banks. Moreover, awareness of IPR
& Technology Centre Schemes is at lower level compared to other schemes of the
government and the number of MSMEs that availed scheme is minimal
85
.
78 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
79 The Role of Government Cash Subsidy Assistance, Entrepreneurship Orientation and Product Innovation on
the Performance of MSMEs in Gelamjaya Village, Pasar Kemis, Tangerang Regency. Journal of Management,
102 - 108. VOL. 12 NO. 1 (2021) https://doi.org/10.35335/enrichment.v12i1.164
80 A STUDY ON MSME’S AWARENESS TOWARDS GOVERNMENT SUBSIDIES (2023)
81 Press Information Bureau 20 Jul 2023
82 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs
83 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs
84 A Report on Issues and Challenges in Financing MSME in Pune, Maharashtra
85 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs Achieving Efqciencies in MSME Sector through Convergence of Schemes 50
Stakeholder consultations and literature review reveal three major barriers to
beneficiary mobilization under various schemes: duplication of schemes, limited
awareness among beneficiaries, and difficulties in accessing resources. These
barriers were further validated during FGDs, where 86% of stakeholders identified
scheme duplication as the most significant obstacle preventing effective participation.
60%
86%
70%
There are multiple schemes
offering similar support
Duplicity of Schemes
MSMEs do not know about
the availability of online portal
for availing the schemes
Hurdles in Access
MSMEs are not aware of all the
schemes benefitting them
Lack of Awareness
Figure 4.2: Barriers in scheme mobilization
The key players of the MSME ecosystem which includes Government Officials, Industry
Associations, Bankers and MSME themselves, are largely unaware of majority of the
schemes. In fact, online portals for accessing information on government schemes are
relatively unused. Schemes such as ZED, MSME Champions, and RAMP, are quite well-
known in industry circles, however, there is severe lack of know-how on how to apply or
navigate the process, rendering these schemes ineffective in practice. For instance, in a poll
of 39 associations at Hyderabad workshop, only one enterprise utilized the Procurement
and Marketing Scheme (PMS), despite many being eligible for it. While government efforts
are commendable, such as the introduction of the RAMP scheme, there are still significant
disconnects between policy design and implementation. Out of 18 schemes listed out, the
awareness regarding the schemes is only about 25%, i.e. 4-5 schemes. The most popular
schemes used by the MSMEs are PMEGP, PM Vishwakarma, MSME Champions and RAMP.
90% of stakeholders have not used any digital portal. 10% use NIVESH MITRA, NCD India
and GeM.
To tackle the issue of limited awareness about available schemes, solutions such as creation
of a centralized facilitation portal, creating an umbrella scheme and merging duplicate
schemes were considered. Creation of a centralised portal was proposed as the optimal
solution.
95% Achieving Efqciencies in MSME Sector through Convergence of Schemes 51
Stakeholder consultations and literature review reveal three major barriers to
beneficiary mobilization under various schemes: duplication of schemes, limited
awareness among beneficiaries, and difficulties in accessing resources. These
barriers were further validated during FGDs, where 86% of stakeholders identified
scheme duplication as the most significant obstacle preventing effective participation.
60%
86%
70%
There are multiple schemes
offering similar support
Duplicity of Schemes
MSMEs do not know about
the availability of online portal
for availing the schemes
Hurdles in Access
MSMEs are not aware of all the
schemes benefitting them
Lack of Awareness
Figure 4.2: Barriers in scheme mobilization
The key players of the MSME ecosystem which includes Government Officials, Industry
Associations, Bankers and MSME themselves, are largely unaware of majority of the
schemes. In fact, online portals for accessing information on government schemes are
relatively unused. Schemes such as ZED, MSME Champions, and RAMP, are quite well-
known in industry circles, however, there is severe lack of know-how on how to apply or
navigate the process, rendering these schemes ineffective in practice. For instance, in a poll
of 39 associations at Hyderabad workshop, only one enterprise utilized the Procurement
and Marketing Scheme (PMS), despite many being eligible for it. While government efforts
are commendable, such as the introduction of the RAMP scheme, there are still significant
disconnects between policy design and implementation. Out of 18 schemes listed out, the
awareness regarding the schemes is only about 25%, i.e. 4-5 schemes. The most popular
schemes used by the MSMEs are PMEGP, PM Vishwakarma, MSME Champions and RAMP.
90% of stakeholders have not used any digital portal. 10% use NIVESH MITRA, NCD India
and GeM.
To tackle the issue of limited awareness about available schemes, solutions such as creation
of a centralized facilitation portal, creating an umbrella scheme and merging duplicate
schemes were considered. Creation of a centralised portal was proposed as the optimal
solution.
95%
Creating a Common
Facilitation Portal
Create an Umbrella
Scheme
Merge Duplicate
Central Schemes
Enable Inter - ministerial
Collaboration
Merge Overlapping
Schemes of State and
Centre
95%
70%
60%
30%
20%
5.1.2. Opinion on convergence
1. Scheme of Fund for Regeneration of Traditional Industries ( SFURTI) and Micro &
Small Enterprises Cluster Development (MSE-CDP)
It was examined in the previous section how both schemes create common facility
centres and improve basic amenities with a fundamental goal of enhancing the
growth and sustainability of small and medium enterprises in India. Both the schemes
emphasize capacity building and skill development through soft interventions such
as training, workshops, and market promotion initiatives, which aim to empower
local artisans and entrepreneurs. Additionally, they support hard interventions by
facilitating the establishment of common facility centres, where businesses can access
shared resources like machinery and raw materials. In essence, SFURTI and MSE-
CDP complement each other in driving the overall advancement of micro and small
enterprises while nurturing the rich heritage of traditional crafts in India.
The theoretical assessment of schemes indicates comparable components. To
obtain a comprehensive understanding from a grassroots perspective, the identified
commonalities alongside the unique aspects of both schemes were presented to the
stakeholders to solicit their opinions regarding the possibility of merging the two
schemes. Stakeholder feedback reinforced the theoretical findings, with suggestions
that the overlapping objectives of these schemes could justify their convergence.
Notably, SFURTI is under consideration for discontinuation, which prompted discussions
on merging its components with MSE-CDP. This move could optimize resource
allocation and reduce duplicative efforts, ultimately enhancing the effectiveness of
cluster development initiatives while minimizing administrative waste. Achieving Efqciencies in MSME Sector through Convergence of Schemes 52
60
38
020406080
YES
NO
Opinion on convergence possibiltiy
of MSE-CDP and SFURTI?
Fig 4.3: MSE-CDP and SFURTI
2. Procurement and Marketing Support (PMS) and International Cooperation (IC)
The Procurement and Marketing Support (PMS) scheme and the International
Cooperation (IC) scheme, are similar, primarily in their objective of enhancing market
access for Micro and Small Enterprises (MSEs) and promoting their competitiveness.
PMS supports participation in domestic and international trade fairs, exhibitions, and
vendor development programs. Similarly, the IC scheme aids MSEs in participating
in international exhibitions and trade fairs, enhancing their visibility and potential for
export. The PMS encourages modernization through interventions such as adopting
e-commerce platforms and modern packaging techniques, while the IC scheme includes
initiatives like financial assistance for first-time exporters to cover costs associated
with registration and certification, thereby improving their readiness for international
markets. In summary, both schemes are designed to strengthen the capabilities of
MSEs, helping them to navigate market challenges and expand their reach, whether
domestically or internationally.
Stakeholders were consulted on whether the Procurement and Marketing Support
(PMS) scheme should be converged with the International Cooperation (IC) scheme.
It was highlighted that although similar, PMS scheme caters to both domestic and
international marketing support for MSMEs, and the IC scheme is limited to providing
assistance specifically for international marketing activities. A large portion of
stakeholders supported the idea of merging PMS into IC, recognizing the potential
for streamlined operations and better alignment of objectives. Many suggested
creating a dedicated marketing wing under the Ministry of MSME to ensure focused
support. This entity would oversee all marketing-related initiatives, both domestic and
international, ensuring focused support. The creation of this wing could also allow for
more specialized assistance in areas such as branding, export promotion, and market
access, without needing to merge the two schemes outright. Achieving Efqciencies in MSME Sector through Convergence of Schemes 53
3. A Scheme for Promotion Of Innovation, Rural Industries & Entrepreneurship (ASPIRE)
(Incubation Component) and MSME Innovative (Incubation Component)
ASPIRE and MSME Innovative scheme are two schemes implemented by MoMSME
that share several similarities, particularly in their focus on fostering entrepreneurship
and innovation. Both initiatives provide skill development opportunities. ASPIRE aims
to equip entrepreneurs with the necessary skills to launch and sustain their businesses
. The MSME Innovative scheme also focuses on skill enhancement, ensuring that
entrepreneurs have access to training that can help them innovate and grow. ASPIRE
provides financial and technical support for business incubation, while MSME Innovative
similarly offers resources to promote business development, particularly for start-ups
and innovative enterprises. Both schemes aim to create an ecosystem where new
businesses can thrive through mentorship and guidance. ASPIRE promotes the use
of technology in enhancing agricultural practices and fostering innovation. The MSME
Innovative scheme also emphasizes technological advancement as a crucial component
for the growth of MSMEs, encouraging the adoption of innovative technologies to
improve competitiveness. These shared objectives indicate a concerted effort by
the government to strengthen incubation facilities for the MSME sector, particularly
in rural and underserved areas, through innovation and skills development. However,
there are opportunities for convergence between the ASPIRE and MSME Innovative
schemes that could enhance their overall effectiveness.
To facilitate a discussion, the similarities of both the schemes to stakeholders were
presented. Although many stakeholders were unfamiliar with the ASPIRE initiative,
they recognized the similarities between the two schemes.
Both the MSME Innovative (Incubation) scheme under MSME Champions and
the ASPIRE scheme share a common objective of promoting innovation and
entrepreneurship through business incubators, utilizing similar support mechanisms.
Based on the stakeholder consultation, the potential for convergence was explored.
While stakeholders identified challenges, such as ASPIRE being a niche scheme
specifically for agro-rural enterprises, they believe convergence is possible and
beneficial. The below mentioned four possible convergence options were discussed
with stakeholders: Achieving Efqciencies in MSME Sector through Convergence of Schemes 54
66%
18%
11%
5%
0%
20%
40%
60%
80%
Opinion on ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)
Create a Special
Agro-Rural
Category within
MSMEInnovative
Establish a
UnifiedIncubation
Framework
Launch a Joint
Fund for
Agro-Rural
Enterprises
Create a Shared
Governance
Structure
Figure 4.4: Opinion on ASPIRE (Incubation Component) and MSME Innovative
(Incubation Component)
Integrating ASPIRE as a special component under MSME Innovative was viewed as
the most feasible option. This approach, where ASPIRE could have a dedicated budget
allocation within the MSME Innovative framework, was seen as the most efficient
way to ensure that agro-rural incubators continue to receive targeted support while
benefiting from the broader reach and resources of MSME Innovative. This solution
addresses the need for specific support mechanisms for agro-rural enterprises while
streamlining efforts under a unified scheme.
The need for convergence between ASPIRE and the MSME Innovative (Incubation
Component) arises from the overlapping objectives of both schemes in fostering
entrepreneurship, skill development, and technological innovation. This convergence
will lead to better synergy between policy interventions, reducing administrative
complexities and enabling holistic support for enterprises at different stages of
innovation and business development. MSME Innovative’s extensive network may be
leveraged while retaining ASPIRE’s focus on rural enterprises. This alignment will also
facilitate knowledge-sharing, mentorship, and capacity-building initiatives, strengthening
the entrepreneurial ecosystem across sectors. Additionally, pooling resources from
both schemes can lead to the creation of joint funds for technology adoption, market
expansion, and export promotion, further boosting MSME competitiveness.
4. Skill Development Initiatives
It is found in literature that absence of a coordinated approach to skill development
86
hinders the growth of MSMEs. Problems like absenteeism, high wage rates, work 86 Naveen Negi, Arvind Mohan, Musliadi Bin Usman, Almighty C. Tabuena. (2023). Challenges of Skill
Development of Workers in MSME Sector: An Empirical Study of Training Organisations. European
Economic Letters (EEL), 13(3), 89–94. https://doi.org/10.52783/eel.v13i3.214 Achieving Efqciencies in MSME Sector through Convergence of Schemes 55
stoppages, training costs, and unionisation are persistent across all sectors of MSMEs
87
.
The technical skills gap is particularly concerning, with a 40%
88
deficit between the
skills produced by education systems and those required by the industry. With respect
to government initiatives aimed at skill development and entrepreneurship, one of the
major challenges that arises is the significant overlap among various schemes. While
these programs are designed to foster employment, entrepreneurship, and capacity
building, the duplication of efforts across ministries leads to inefficiencies in resource
allocation, confusion among beneficiaries, and fragmented implementation. For instance,
many schemes with similar goals of promoting self-employment and entrepreneurship
exist under different ministries. For instance, PMEGP is similar to the Start-up India
initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), as
both focus on encouraging entrepreneurship and creating jobs. The schemes target
similar beneficiaries (youth and unemployed) with a similar objective. Similarly, for
entrepreneurial training there is Entrepreneurship and Skill Development Programme
(ESDP) and also Pradhan Mantri Kaushal Vikas Yojana (PMKVY) by the Ministry of Skill
Development and Entrepreneurship (MSDE)
89
and Deen Dayal Upadhyaya Grameen
Kaushalya Yojana (DDU-GKY) by the Ministry of Rural Development (MoRD)
90
, all these
schemes aim to skill and train people, including rural youth, for self-employment or
wage employment.
Analysis of qualitative data from stakeholder workshops reveal that majority of the
workforce is unskilled or low-skilled with little to no knowledge of factory operations.
Another major concern is that skilled youth are moving out of the country, either
to seek better employment opportunities or higher wages. This migration of talent
exemplifies the phenomenon of brain drain, where the emigration of highly educated
or skilled individuals can lead to a significant loss of human capital for the home
country. Although there are programs like PMEGP, ATI, ESDP that are catering to skill
development, the MSMEs are not able to take full benefit of these schemes due to:
Too many different portals,
Lack of digital access
Unawareness about how and where to apply.
For MSMEs to be able to utilize schemes like ESDP and PMEGP properly, they need all
the skill related schemes in a single portal.
87 Adhinarayan, B. (2014). An evaluation of the problems and prospects of small-scale entrepreneurship in an emerging economy: A study of selected industries in Tamil Nadu districts [PhD Thesis]. Anna University.
88 Source: World Bank’s Ease of Doing Business Report (2023), Indicators and Research Articles
89 Schemes & Initiatives - https://www.msde.gov.in/en/schemes-initiatives
90 DDUGKY - http://ddugky.info/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 56
0510 15 20 25
Digital Literacy and Technology Integration
Lean Management and Process Optimization
Compliance and Regulatory
Export and Trade
Entrepreneurial and Management Training
Technical Skill Upgradation
Skill Support required by MSMEs
Figure 4.5: Skill support required by MSMEs
Enterprises need training in areas of entrepreneurial training, technical skills, trade-related
skills, regulatory compliance and digital literacy.
Proposed ways for convergence of skill development initiatives:
1
Unified Skill Development Scheme for MSMEs: A single scheme that consolidates various
skill initiatives to reduce fragmentation and improve accessibility.
2
National Council for MSME Skill Development: A dedicated body to oversee and
coordinate skill development efforts across different sectors.
3
Integrated Digital Platform for MSME Skill Development Programs: A single online portal
that brings all skill-related programs together, making it easier for MSMEs to access and
apply.
4
Sector-Specific Training Programmes with Industry-Academia Linkages: Customized
training programs tailored to the specific needs of different industries, designed in
collaboration with academic institutions and industry experts.
In summary, feedback from stakeholders complements the research findings
and stresses on the importance of aligning the MoMSME initiatives, revealing a
strong consensus on the need for integration. In the next chapter, the specific
recommendations for the convergence of these schemes are outlined, drawing on
the insights gathered throughout this research to propose actionable strategies
that can improve collaboration and impact within the MSME sector. 05
RECOMMENDATIONS
FOR CONVERGENCE
AND WAY FORWARD Achieving Efqciencies in MSME Sector through Convergence of Schemes 58
The recommendations are designed to streamline information access, harmonize
processes, and address broader issues through a two-pronged approach:
Information Convergence, Process Convergence. Each component aims to simplify
the operational landscape for MSMEs, reduce redundancies, and enable a more
supportive ecosystem for growth. Implementing these strategies can help create
an integrated support framework that enhances efficiency, improves accessibility,
and empowers MSMEs to capitalize on available opportunities.
INFORMATION CONVERGENCE
RECOMMENDATION 1: CENTRALIZED PORTAL FOR MSMES:
Currently, MSMEs face challenges in accessing relevant information on government
schemes, compliance requirements, and financial assistance due to the dispersed nature
of existing platforms such as My MSME, NSWS, My Scheme, and the Udyam Registration
Portal. The fragmented information infrastructure may lead to inefficiencies, increased
administrative burdens, and potential information gaps. Even, searching for “schemes for
MSME” on Google, yields scattered results, lacking a cohesive representation of available
resources.
Research indicates that fragmented information infrastructure increases the cost of
compliance and hampers the ability of MSMEs to fully leverage government schemes
91
.
Additionally, the absence of a unified portal limits MSMEs’ growth potential, as many are
unaware of beneficial schemes or compliance regulations.
91 Understanding Indian MSME Sector (May 2025) https://www.sidbi.in/uploads/Understanding_Indian_MSME_ sector_Progress_and_Challenges_13_05_25_Final.pdf#:~:text=However%2C%20MSMEs%20need%20to%20 focus%20on%20enhancing,digital%20adoption%2C%20skilling%2C%20labour%20availability%20and%20 infrastructure.&text=Despite%20its%20crucial%20role%2C%20the%20MSME%20sector,Inadequate%20 infrastructure%20and%20technology%20adoption%2C%20hindering%20productivity. Achieving Efqciencies in MSME Sector through Convergence of Schemes 59
The Udyam Registration Portal has API integration with more than 44 portals. On the
my.msme.gov.in portal, detailed information on schemes, compliance requirements, etc.,
is available. However, there is still immense scope for streamlining the online platforms.
Therefore, the Ministry of MSME is working on a Portal of Portals, by which the information
convergence will be further streamlined and made available for all stakeholders.
Proposed Centralized Portal for MSMEs:
Although the Ministry of MSME is developing a “Portal of Portals” to further streamline
information convergence and enhance accessibility for all stakeholders, it is suggested
that the portal may include the following modules to provide comprehensive support for
MSMEs, in line with some of the best practices such as Canada’s BizPal or Singapore’s
GoBusiness.
Module 1 - Basic Information Module
This module serves as a repository of four fundamental information for MSMEs, including:
Scheme Information: Details
about all central (MoMSME
and Other Ministries) and state
government schemes, including
eligibility criteria and benefits.
Compliance Requirements: Pre-
filled data from Income Tax and
GST. Guidance on regulatory and
tax compliance.
Financial Assistance:
Information on loan schemes,
grants, and subsidies from
various government and private
institutions.
Generative AI Model: A Large
Language Model (LLM) will allow
the MEs to probe and seek
guidance related to available
schemes and their eligibility.
Module 2 - Process Module
This module handles the procedural aspects of applying for schemes, tracking applications, and interacting with various authorities. MSMEs can monitor the progress of their applications through a dashboard that shows where the application is in the process - filing, verification, approval, or disbursal. Achieving Efqciencies in MSME Sector through Convergence of Schemes 60
BankIntegraon :
Theplaorm willlink
with partnerbanks
forloan processing,
disbursaloffunds,
and trackingof
repaymentschedules.
B
T
re
Approval
Process
:
Onceverified,the
applicaonwill
proceedtothe
approvingauthority,
whichcan allocate
resources,grants,or
loans.
a
r
faocgbTrmhby
ulymocras
:
Roungapplicaons
totherelevant
authories for
verificaon.
?
requestclarificaon
fordocuments.
R
r
wwncbTrmh
Filing
:
MSMEscan file
schemeapplicaons
directlythrough the
portal with a simple
step-by-stepguide.
Module 3 - Compliance Module
This module may be designed to simplify and support MSMEs in fulfilling regulatory and
statutory requirements, minimizing risks of penalties or de-registration. It will serve as a
virtual compliance officer offering MSMEs structured, real-time, and customized guidance
on staying compliant with various laws and rules.
Document Repository: The module shall host a secure document repository where MSMEs
can upload and manage all important compliance-related documents, such as GST filings,
income tax returns, environmental clearances, audit reports, and employee welfare filings.
By integrating with government systems like DigiLocker, PAN, and GSTN, the portal
can also enable automatic fetching and validation of compliance documents to avoid
duplication and reduce manual errors.
Tracking and Alerts: To support timely compliance, the module shall feature an automated
compliance calendar that tracks enterprise-specific deadlines across domains like tax,
labour, environment, and sector-specific regulations. MSMEs will receive personalized alerts
and reminders via SMS, email, and in-portal notifications for upcoming filings, license
renewals, or audit submissions.
Guided Compliance Assistance: Guided assistance through step-by-step digital walkthroughs
may be offered that explain how to complete common compliance tasks, such as filing
GST returns, renewing licenses, or fulfilling annual reporting requirements. An AI-enabled
chatbot, trained on a large language model, can be embedded in the portal to offer real-
time, multilingual support for answering compliance-related queries.
Module 4 - Market Research Module
This module will provide data-driven insights for MSMEs, helping them to:
Identify Growth Opportunities: Leveraging generative AI technologies, the module
shall provide detailed market analysis customized to the nature, size, and sector of the
enterprise. This analysis will include real-time trends, emerging demand hotspots, and
consumer preferences. The module may also tap into enterprise-level databases to offer
benchmarking insights, enabling MSMEs to evaluate their performance in comparison to
peers, identify market gaps, and refine their competitive strategies.
Access Financial Resources: The module shall offer structured and searchable information
on a wide range of financing instruments, including traditional bank loans, working capital
finance, venture capital funding, angel investment networks, and government-sponsored
grants or subsidy programs. The portal will help users discover financing opportunities
based on their eligibility, credit profile, and sectoral alignment. Achieving Efqciencies in MSME Sector through Convergence of Schemes 61
Explore Export Potential: For MSMEs interested in exploring international markets,
the module shall provide guidance on entering new markets, including sector-specific
regulations and logistics.
Technological Integration
AI-Driven Personalization: The portal will use AI algorithms to analyse the business
profile of each MSME and provide tailored scheme recommendations.
Chatbot for Real-Time Assistance: An AI chatbot will offer step-by-step guidance
on navigating compliance procedures, applying for schemes, and availing financial
support.
Mobile App Integration: The platform will include a mobile application to provide
MEs with seamless access to information and real-time notifications.
Comparison of Existing Platforms
Presently the MSMEs have access to the portals namely, My MSME, NSWS, My Scheme
and Udyam Reg. Portal.
Table 5.1 highlights gaps in the current platforms and the advantages the proposed
centralized portal will offer:
Table 5.1 – Comparison between proposed portal and existing portals of MSMEs
Particulars
Proposed
Portal
My
MSME
NSWS
My
Scheme
Udyam
Registration
Portal
Schemes availability (Central,
State & Other Ministry)
Yes Yes Yes Yes Yes
Online forms for direct filing and
applying of schemes
Yes PartiallyPartially No No
e-filing - DSC or Aadhar OTP Yes Yes Yes No Yes
Online Tracking Mechanism Yes Yes Yes No No
Approving authority access Yes Yes Yes No Yes
Helpline 24x7Yes Yes Yes No No
Artificial Intelligence Enabled Yes No No No No
Chat-BotYes No No No No
Mobile ApplicationYes Yes Yes No No
Connected to Udyam Server for
pre-filled data
Yes No No No Yes Achieving Efqciencies in MSME Sector through Convergence of Schemes 62
Comparison of Proposed Portal vs. Best Practices
The table below compares the proposed portal with some of the best practices.
Table 5.2 – Comparison between proposed portal and best practices
Feature
Proposed
Portal
BizPaL
(Canada)
GoBusiness
(Singapore)
TS-iPASS
(Telangana,
India)
Germany’s
Einheitlicher
Ansprechpart-
ner
Business
Registration
Service
(Australia)
Cross-
Government
Integration
Yes -
Central,
State, and
Ministry
Yes -
Federal,
Provincial,
Municipal
Yes - Over
20
Government
Agencies
Yes -
Multiple
State
Agencies
Yes - State
and Local
Authorities
Yes -
Federal and
State
Authorities
Personalized
Recommenda-
tions
Yes -
Based on
business
profile
Yes -
Based on
business
type and
location
Yes -
AI-Driven
based on
business
needs
No
Yes - Based
on Business
Requirements
Yes - Based
on Business
Activities
Real-Time
Updates &
Compliance
Yes -
Regulato-
ry updates
and track-
ing
No -
Focus on
permits
and
licenses
Yes -
Compliance
reminders
and
updates
Yes - Track
applications
and
approvals
Yes - Real-
Time
Application
Tracking
Yes -
Updates on
Registration
Status
AI-Enabled
Chatbot for
Assistance
Yes - 24/7
Support
No
Yes - Per-
sonalized
Assistance
via AI
No NoNo
Mobile App
Integration
Yes No No Yes NoYes
Online Track-
ing of
Application
Status
Yes -
Track
applica-
tions and
approvals
Yes -
Track
permits
and
licenses
Yes - Track
licenses and
schemes
Yes - Track
approvals
and status
updates
Yes - Track
Status of
Permits and
Licenses
Yes - Track
Registration
Status
Based on the comparison of best practices, the proposed portal integrates features from
BizPaL, TS-iPASS, Einheitlicher Ansprechpartner, and Australia’s Business Registration
Service while enhancing personalization through AI-driven recommendations and real-
time updates. It will also provide 24/7 support via a chatbot. Furthermore, the proposed
portal broadens its scope by incorporating cross-government integration at the central,
state, and ministry levels, making it more comprehensive than the approaches adopted
by the other portals, which are often limited to specific administrative levels or services. Achieving Efqciencies in MSME Sector through Convergence of Schemes 63
Building the Portal:
To ensure robust design, technical efficiency, and policy alignment, the following institutions
are proposed to play key roles in the development and management of the portal.
Relevant technology development
institutions / Advanced computing
agencies / Specialized IT research
bodies
To provide technical expertise in the development of
advanced IT solutions, including artificial intelligence,
data analytics, and management systems essential
for the portal’s functionality.
Government IT infrastructure agencies
/ Digital governance bodies / Public
sector technology service providers
To support the development of secure, scalable,
and interoperable government applications, ensuring
seamless integration with existing digital platforms of
ministries and departments.
Government agencies responsible for
MSME development
To serve as the Nodal Agency responsible for
coordination, oversight, and ensuring alignment of
the portal with the broader objectives of MSME
policy and service delivery.
PROCESS CONVERGENCE
RECOMMENDATION 2: MICRO AND SMALL ENTERPRISES -
CLUSTER DEVELOPMENT PROGRAMME (MSE-CDP) AND SCHEME
OF FUND FOR REGENERATION OF TRADITIONAL INDUSTRIES
(SFURTI)
Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is implemented
by different agencies, including NGOs, institutions of central and state governments,
and Panchayati Raj Institutions (PRIs), whereas the O/o DC-MSME oversees ‘Micro and
Small Enterprises - Cluster Development Programme’ (MSE-CDP). The stakeholders and
implementation frameworks are different, and therefore, it may be challenging to converge
the two schemes. However, the suggestion for the merger of SFURTI with the MSE-CDP
stems from the overlap in key components of both schemes, such as cluster development
through hard and soft interventions. While MSE-CDP focuses on enhancing infrastructure
and competitiveness for MSE clusters, SFURTI also supports micro and small enterprises
but has a narrower focus of penetrating uncovered and aspirational districts, promoting
traditional industries, and preserving endangered crafts and arts.
Given SFURTI’s smaller budget and narrower scope, integrating its components within
MSE-CDP would enhance resource efficiency and program reach. The merger would ensure
a special focus on traditional industries within the broader MSE-CDP framework, allowing
for better coordination, greater financial backing, and more comprehensive support for
cluster development while preserving SFURTI’s original objective of supporting traditional
and endangered industries. This approach would enable a more unified and impactful
mechanism for supporting MSEs across various sectors, including those with unique
cultural and economic significance. Achieving Efqciencies in MSME Sector through Convergence of Schemes 64
Table 5.3 – Comparison between MSE-CDP and SFRUTI
AspectMSE-CDP SFURTI
Objective
To enhance the competitiveness,
productivity, and sustainability of micro
and small enterprises by developing
clusters with shared infrastructure and
resources.
To revitalize and strengthen
traditional industries and
artisan-based clusters, ensuring
sustainable employment and
improving product quality.
Target
Audience
Micro and Small Enterprises (MSEs)
operating in clusters across various
industries, including manufacturing,
food processing, and handicrafts.
Traditional artisans and industries
involved in coir, khadi, handicrafts,
bamboo, honey, and other rural
trades.
Support
Mechanism
Provides financial support for setting
up Common Facility Centers (CFCs),
infrastructure development, and
cluster-based interventions.
Offers grants for capacity building,
infrastructure development,
market promotion, and technology
upgradation for traditional
industries.
Skill
Development
Facilitates skill development through
workshops, training programs, and
technology transfer initiatives for MSEs.
Focuses on artisan training,
skill enhancement, and product
diversification to improve
marketability and productivity.
Access to
Finance
Provides funding support with grants
up to 70-90% of project costs for
infrastructure and shared facilities.
Grants up to 90% of the project
cost, with financial assistance
from the Ministry of MSME and
implementing agencies.
Technology
Integration
Supports technology adoption,
automation, and the establishment
of common production facilities with
advanced machinery.
Encourages the use of modern
tools and sustainable production
techniques to enhance traditional
craftsmanship.
Government
Support
Implemented by the Ministry of MSME,
with financial support and technical
guidance provided to industry clusters.
Implemented by the Ministry of
MSME through nodal agencies
like KVIC, Coir Board, and other
industry bodies.
Convergence Framework:
Special Category
for Traditional
Industries within
MSE-CDP
01
Unified
Governance
Structure
02
Consolidated
Funding
03
Monitoring and
Evaluation
04 Achieving Efqciencies in MSME Sector through Convergence of Schemes 65
A structured convergence mechanism for merging SFURTI with MSE-CDP shall be designed
to ensure effective resource utilization and retention of the unique focus on traditional
industries.
1. Special Category for Traditional Industries within MSE-CDP (Sub-scheme Creation)
A dedicated sub-scheme can be established within MSE-CDP to specifically address
traditional industries, preserving the focus on crafts, arts, and endangered industries
that SFURTI supports. As per SFURTI’s original goal, the emphasis on clusters in
uncovered and aspirational districts may be continued, while also integrating these
into MSE-CDP’s larger cluster development strategy.
2. Unified Governance Structure
Relevant support institutions for MSMEs can be the nodal agency for the overall
administration of the merged program but regional agencies such as NGOs, PRIs, and
institutions may be involved with SFURTI to act as implementation partners, particularly
in traditional industry-focused clusters. The local institutions should be empowered to
retain their role in traditional industry clusters under the special category, leveraging
their expertise and local networks, while MSE-CDP oversees broader industrial cluster
development.
3. Consolidated Funding
The budgets of SFURTI and MSE-CDP can be combined to form a larger pool of
funds for cluster development, while earmarking a specific percentage for traditional
industries. This ensures focused investment in sectors that need special attention
without diluting the financial strength of the overall program. Flexibility should be
provided in allocating resources to uncovered or aspirational districts, depending on
the requirements of each sector, allowing greater responsiveness to local needs.
4. Monitoring and Evaluation
A comprehensive monitoring and evaluation system should be developed that tracks
both the performance of traditional industries under the special category and the
broader impact of the MSE-CDP. This will help assess the effectiveness of interventions
across different types of clusters. The cluster-level beneficiaries can be tracked using
digital tools for feedback on outcome-based KPIs such as infrastructure use, market
performance, and skill enhancement.
Implementation Framework
This framework outlines the key steps, roles, and processes for the successful convergence
of SFURTI and MSE-CDP. It streamlines resources, optimizes cluster development, and
maintains the focus on traditional industries. The framework ensures a phased and strategic
integration while preserving each scheme’s unique objectives. The Ministry of MSME, along
with its state-level counterparts, designated nodal agencies, and implementing partners
such as NGOs and PRIs, may collaboratively lead this process across the following four
core components: Achieving Efqciencies in MSME Sector through Convergence of Schemes 66
1. Strategic Planning and Program Realignment
A detailed review of the existing components of SFURTI and MSE-CDP can be
conducted, focusing on budget allocations, the scope of interventions (both hard and
soft), and geographic focus. Based on this review, both programs can be aligned under
a single strategic framework, designating MSE-CDP as the umbrella program for all
cluster development initiatives within the MSME sector. Within this unified structure, a
special category for traditional industries can be created under MSE-CDP, incorporating
the objectives and focus areas of SFURTI. The combined budget of both schemes can
be reallocated, ensuring that a portion (15–20%) of the total budget is earmarked
specifically for the development of traditional industries, particularly in uncovered and
aspirational districts.
2. Institutional Coordination and Governance Mechanism
It is proposed that the existing governance structure of MSE-CDP continue to oversee
the integrated program, thereby ensuring consistency in cluster development efforts
across all sectors. Nodal agencies currently engaged in implementing SFURTI—such as
NGOs, Panchayati Raj Institutions (PRIs), and institutions from both central and state
governments—may operate under the MSE-CDP framework for the specific purpose
of supporting traditional industry clusters. These agencies are expected to retain
their existing roles and domain expertise while aligning their efforts with the broader
objectives of the unified cluster development strategy. Additionally, the formation of
state- and district-level advisory boards is proposed, comprising representatives from
the Ministry of MSME, NGOs, industry experts, and associations of traditional crafts
and artisans, to provide localized input and guide cluster development priorities at
the regional level.
3. Program Implementation and Cluster Identification
It is recommended to conduct a joint mapping exercise to identify existing clusters
under both SFURTI and MSE-CDP, as well as to map new clusters in districts that align
with the objectives of both schemes. Based on this exercise, clusters can be categorized
into two distinct groups to enable the development of tailored interventions. The
first category can be termed “General MSE Clusters,” which refers to standard MSE
clusters typically targeted under MSE-CDP. The second category can be defined as
“Traditional Industries Clusters,” focusing on areas previously covered under SFURTI,
such as traditional crafts and arts. This categorization will help streamline program
implementation and ensure that interventions are designed according to the unique
needs of each cluster type.
4. Monitoring and Evaluation Framework
A unified M&E framework to integrate progress tracking for both traditional industry
clusters and general MSE clusters will be useful. This framework should include clearly
defined Key Performance Indicators (KPIs) for each category, covering aspects such
as cluster growth, technology adoption, and improvements in artisan livelihoods. Bi- Achieving Efqciencies in MSME Sector through Convergence of Schemes 67
annual performance reviews could be conducted for both types of clusters to ensure
effective implementation. For traditional industries, the focus should be on ensuring
adequate support for market linkages and the preservation of cultural crafts, while
for MSE clusters, the emphasis should remain on enhancing competitiveness and
fostering innovation. Additionally, feedback mechanisms involving advisory boards and
implementing agencies should be put in place to continuously refine and improve
interventions based on real-time data and ground-level insights.
5. Timeline
02 46 81 0
Months
12 14 16 18
Phase IV
(Annual)
Phase III
(10-15 months)
Phase II
(5-10 months)
Phase I
(0-5 months)
Strategie Planning and
Program Realignment
Institutional Coordination
and Governance Mechanism
Program Implementation and
Cluster Identification
Monitoring and
Evaluation
IMPLEMENTATION TIMELINE
Benefits
The following benefits may emerge from the suggested convergence model:
Improved
Infrastructure
2
Better Capacity
Building
3
Enhanced
Technological
Upgrades
4
EnhancedMarket
Linkages
1 Achieving Efqciencies in MSME Sector through Convergence of Schemes 68
The merger of SFURTI with MSE-CDP shall create a streamlined and efficient support
system for MSME clusters, optimizing resources and eliminating redundancy. It ensures
that traditional industries, especially in uncovered and aspirational districts, receive focused
attention through specialized interventions while benefiting from the broader infrastructure
and market development initiatives of MSE-CDP. By leveraging SFURTI’s grassroots
expertise and MSE-CDP’s robust cluster development framework, this convergence
promotes cohesive growth, preserving cultural heritage while boosting the competitiveness
of both traditional and modern MSMEs. This unified approach enhances geographic reach,
fosters public-private partnerships, and drives sustainable economic growth, ensuring
balanced development across sectors.
Challenges
Coordination and Alignment of Objectives: MSE-CDP and SFURTI, while both aimed at
boosting MSMEs, have distinct objectives. MSE-CDP focuses on infrastructure development,
while SFURTI is more aligned with traditional industries and artisan-based clusters. Aligning
these distinct goals is a legitimate challenge, and misalignment could lead to fragmented
efforts and delays in meeting both objectives simultaneously.
Complex Governance Structure: One of the challenges in scheme convergence is that
SFURTI is implemented by multiple agencies, including NGOs, institutions of central and
state governments, and Panchayati Raj Institutions (PRIs), whereas the O/o DC-MSME
oversees MSE-CDP. The involvement of different stakeholders and varying implementation
frameworks makes it difficult to align and integrate these two schemes effectively. With
multiple stakeholders involved coordination becomes complex.
Financial Resource Allocation and Management: Allocating financial resources would
require careful planning to avoid resource mismanagement or disproportionate funding
to certain clusters. Inadequate or uneven distribution of funds could result in some clusters
receiving insufficient financial support, while others might be overfunded, leading to
disparities in development.
Varied Levels of Cluster Readiness: Some clusters may be better equipped to absorb and
utilize infrastructure or skill development assistance, while others may require significant
groundwork before being eligible for the convergence benefits. This could lead to slower
development in regions where traditional industries lack basic infrastructure, further
widening the gap between advanced clusters and underdeveloped ones. Ensuring readiness
across diverse clusters will be time-intensive and may slow down the convergence process.
Resistance to Change in Traditional Industries: Traditional industries, particularly artisans,
may be resistant to modern technologies or new production techniques introduced under
the MSE-CDP scheme. There may also be concerns about losing cultural identity or
traditional craftsmanship. Resistance to adopting modern methods could undermine the
productivity and competitiveness gains that the convergence aims to achieve, especially
in clusters where preserving cultural heritage is crucial.
Capacity Gaps in Implementation Agencies: The implementing agencies might not have
sufficient capacity, in terms of manpower and expertise, to handle the simultaneous rollout
of both schemes. Capacity limitations could lead to delays, poor quality of services, or
mismanagement, which would dilute the overall impact of the convergence. Achieving Efqciencies in MSME Sector through Convergence of Schemes 69
RECOMMENDATION 3: CONVERGE SKILL DEVELOPMENT
PROGRAMMES
The skills ecosystem in India’s MSME sector plays a crucial role in improving productivity,
enhancing competitiveness, and driving sectoral growth. As the backbone of the Indian
economy, MSMEs contribute significantly to employment generation and economic
development. However, the sector continues to face challenges in bridging the skill
gap, primarily due to evolving technological demands and the diverse needs of various
industries. A robust and responsive skills ecosystem is essential for equipping the MSME
workforce with industry-relevant competencies, fostering entrepreneurship, and ensuring
long-term, sustainable economic growth.
Building such an ecosystem requires a coordinated and comprehensive approach involving
key stakeholders, including government bodies, industry partners, training institutions, and
financial organizations. Together, these actors can develop a dynamic skill development
framework tailored to the unique needs of MSMEs.
To better understand the skill requirements of the sector, an analysis was conducted,
and a comprehensive mapping of existing schemes addressing these needs is presented
below. This mapping highlights how various programs respond to specific competency
gaps within the MSME sector. Identifying these linkages also allows for the recognition of
overlaps, gaps, and opportunities for strategic convergence within the current framework.
Table 5.4: Skill required for MSMEs
Required SkillRelated MSME SchemesDescription
Entrepreneurial
and Management
Training
Entrepreneurship and Skill
Development Programme
(ESDP)
Prime Minister Employment
Generation Programme
(PMEGP)
Training in business planning,
financial management, marketing,
and entrepreneurship development.
Training in leadership, communication,
negotiation, customer service, and team
management.
Technical Skill
Upgradation
Tool Rooms and Technical
Institutions
Industry-specific technical skills,
technology adoption, product quality,
and skill enhancement.
Digital Literacy
and Technology
Integration
Digital MSME
Training on digital tools like ERP, CRM,
e-commerce, digital marketing, and
cybersecurity.
Lean Management
and Process
Optimization
MSME-Competitive (Lean)
Training on lean practices, process
optimization, supply chain, and inventory
management.
Compliance and
Regulatory
ZED (Zero Defect Zero
Effect) Certification
Scheme,
National SC/ST Hub
Training on quality standards, regulatory
compliance, sustainability practices, and
statutory requirements. Achieving Efqciencies in MSME Sector through Convergence of Schemes 70
Export and Trade
International Cooperation
Scheme,
ESDP
Training on export procedures,
international trade regulations,
documentation, and market access.
Innovation and
Incubation Support
Technology Centres and
Incubation Centres,
ASPIRE
Training on product innovation, design
thinking, prototyping, incubation, and
startup support.
Several initiatives are actively addressing the need for targeted skill development across the
MSME sector, which includes a diverse range of enterprises, including informal and micro
units. While there may be potential for convergence in specific areas of skill development,
a complete merger of schemes may not be practical due to differences in target
beneficiaries, sectoral focus, and the technical nature of training content. Nevertheless,
the Ministry of MSME is already collaborating with the Ministry of Skill Development and
Entrepreneurship (MSDE) and other stakeholders, such as GeM and SIDBI, to identify and
implement areas of alignment wherever feasible. Based on a thorough review of existing
schemes, a detailed mapping of skill requirements, and consultations with key stakeholders,
the recommendations for convergence and potential merger have been formulated. These
approaches are aligned with the profile of beneficiaries and the specific nature of training
required, and are discussed below.
Convergence framework
The following merger and convergence approaches can be adopted based on the
beneficiaries and the type of training required:
Entrepreneurship and Business Skills Development Program
I
MSME Technical Skill Development Program
II
Training program for Rural and Women Artisans
III
i. Entrepreneurship and Business Skills Development Program:
It is recommended to merge the skill component of Prime Minister Employment
Generation Programme (PMEGP), International Cooperation (IC), and Procurement and
Marketing Scheme (PMS) under Entrepreneurship and Skill Development Programme
(ESDP) to provide entrepreneurial skills, financial literacy, market access, export, and
credit access training. Achieving Efqciencies in MSME Sector through Convergence of Schemes 71
While the full merger of PMEGP may be challenging due to its status as a flagship scheme,
aligning its certification and training components with ESDP can help reduce duplication,
optimize resources, and improve efficiency.
ii. MSME Technical Skill Development Program:
A unified implementation approach is recommended to improve coordination among
the capacity-building components of Tool Rooms, Technical Institutions, MSME Lean
Scheme, MSME Digital, Technology Centres, and other affiliated training institutions.
The focus should be on industry-specific technical skills, lean manufacturing practices,
and adoption of advanced technologies.
Joint Implementation Committee
Shared Resource Utilization
Unified Training Calendar
Cross - Scheme Trainer Pools
Industry Collaboration
Taskforce
Representatives
from the Tool
Rooms, MSME
Champions,
Incubation centres,
Training institutions,
Academia and
Technology Centres.
Coordinate activities
to ensure alignment
in curriculum design,
scheduling, and
capacity-building.
Shared usage of
training
infrastructure, such
as machinery,
equipment, and
technology labs,
among the Tool
Rooms, Technology
Centres, and other
related schemes.
Ensures that
existing resources
are optimally
utilized without
duplicating efforts.
Align
capacity-building
sessions, skill
development
training, and lean
manufacturing
workshops.
This will help
avoid scheduling
conflicts and
provide a more
efficient allocation
of resources.
Create a pool of
expert trainers
from Tool
Rooms, Training
institutions, and
Technology
Centres that can
be shared across
all training
initiatives
To design
industry-specific
curricula and
offer
apprenticeships
across training
initiatives.
This will foster a
more integrated
and practical
approach to skill
development. Achieving Efqciencies in MSME Sector through Convergence of Schemes 72
iii. Establish a Coordination Mechanism for Technical Skill Development
Given the diversity of technical training across MSME schemes, a full merger may not be
practical. Instead, a coordination mechanism is proposed through a Joint Implementation
Committee comprising representatives from Tool Rooms, training institutions, Technology
Centres, and incubation hubs. This committee would align curricula, schedules, and
capacity-building efforts. Shared infrastructure use, a Unified Training Calendar, and
Cross-Scheme Trainer Pools would help optimize resources and avoid duplication. An
Industry Collaboration Taskforce would support the design of sector-specific curricula
and apprenticeships, ensuring a more integrated and practical skill development approach.
Establishing a dedicated coordination mechanism or oversight committee could help track
training offerings, align them with regional MSME needs, and avoid programmatic overlap.
iv. Training program for Rural and Women Artisans:
The schemes such as Coir Vikas Yojana, National SC-ST Hub Scheme, and Khadi
& Village Industries programs can continue to operate independently, with training
initiatives focused on promoting traditional crafts, rural industries, marginalized
communities, and women’s entrepreneurship for inclusive development.
However, convergence through a unified training framework—such as a shared pool
of expert trainers and collaboration with industry partners—can enhance the quality
and consistency of training across schemes. Such an approach allows for flexibility
while addressing the specific capacity-building needs of diverse beneficiary groups.
Implementation Framework
To implement the recommended convergence of various MSME skill development schemes,
a structured approach is necessary to streamline the processes while ensuring effective
coordination among stakeholders. The Ministry of MSME, or a designated institution,
may serve as the central coordinating authority for convergence, supported by key
stakeholders such as the Inter-ministerial Steering Committee, MSME policy bodies, skill
scheme administrators, and financial authorities. The following framework outlines key
steps for the successful implementation of the proposed convergence:
1. Governance and Oversight Mechanism
A dedicated Inter-ministerial Steering Committee for Skill Development in the MSME
sector can be established, comprising representatives from relevant government
agencies responsible for skilling and entrepreneurship, skill development institutions,
policy research and advisory organizations, institutional stakeholders within the MSME
sector, and financial institutions. This committee will play a central role in overseeing
the integration of programs, ensuring effective inter-ministerial coordination, and
providing strategic direction for skill development initiatives across various sectors.
2. Implementation Approach
i. Entrepreneurship and Business Skills Development Program
For Entrepreneurship and Business Skills Development Program, NSDC’s existing
e-learning platforms and partner training institutes of MoMSME can be used for
online and in-person training. Collaborations with industry associations, banks, Achieving Efqciencies in MSME Sector through Convergence of Schemes 73
and financial institutions may be made to provide practical training in business
management and credit access. Clear KPIs should be established to track the
success of training programs, such as the number of MSMEs trained, certifications
awarded, and business growth metrics.
ii. MSME Technical Skill Development Program
For coordination of technical programs, the technical and technological training
components can be maintained under their respective schemes, but improve
coordination. To do this, the Steering Committee under the Ministry of MSME can
oversee the alignment of training programs offered by Tool Rooms, Technical
Institutions, and Technology Centres. The MSME Sampark Portal can be used
to consolidate the offerings of Tool Rooms, MSME Lean Scheme, MSME Digital,
and other technical institutions. Programs must be tailored based on specific
industry needs, ensuring that training covers lean manufacturing, digitalization,
and the adoption of advanced technologies. Training programs should be adapted
to the needs of MSMEs in specific regions to ensure relevance and maximum
impact. Feedback from MSMEs should be collected on the usefulness of the
training programs, and regularly update the curriculum to meet emerging industry
requirements.
iii. Training program for Rural and Women Artisans
A cross-scheme pool of expert trainers could be created - who can provide
specialized training across these sectors, ensuring consistency and quality.
Partnership with local cooperatives, women’s self-help groups (SHGs), and industry
partners can be built to enhance the market-readiness of trained artisans and rural
entrepreneurs. It should be ensured that skill development programs for women
and marginalized communities include components like digital marketing, branding,
and e-commerce for expanding market access
3. Funding Mechanism
A unified funding framework can be considered by pooling financial resources from
various schemes such as PMEGP, IC, PMS, and other MSME technical schemes under
the broader MSME Skill Development budget. This integration would require close
coordination with the Ministry of Finance. A transparent system for resource allocation
is encouraged, based on regional demands, target sectors, and the number of MSMEs
participating in each program. Additionally, a performance-based funding model may
be adopted, where training institutions receive additional funds based on specific
metrics such as course completion rates, MSME growth post-training, and job creation
outcomes.
4. Capacity Building and Strengthening of Training Infrastructure
To support the increased demand from converged programs, efforts can be made
to strengthen existing training infrastructure, including NSDC-affiliated institutions,
MSME Tool Rooms, and Technology Centres. A comprehensive trainer capacity-
building program is encouraged to enhance the capabilities of trainers across business ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 74
and technical domains. It is advisable that all participating training institutes be
accredited through NSDC to ensure consistent quality standards. A dedicated space
for collaboration between industries, training institutions, and MSMEs could further
enable co-development of industry-relevant courses and apprenticeships. The MSME
Sampark portal may also be upgraded to enhance functionality and accessibility by
incorporating these additional features:
Single Window Access: Integrate MSME Sampark with platforms like the Skill India
Digital Hub and National Career Service to provide a single access point for all
MSME skill development programs and resources.
Integrated Training Calendar: Add a real-time, centralized training calendar with
filters by scheme, region, and course type, along with SMS/email notifications for
session reminders.
Multilingual Support: Provide platform access in multiple regional languages for
wider accessibility.
5. Monitoring and Evaluation (M&E)
An integrated online monitoring system is recommended to track the progress of
the convergence initiative. Key performance indicators may include the number of
MSMEs trained across schemes, participant satisfaction, business growth post-training,
and employment generation. A periodic third-party evaluations can be conducted to
assess the effectiveness and impact of the strategy, enabling continuous improvement.
6. Awareness and Outreach
It is important to design and implement comprehensive awareness campaigns that
specifically target MSMEs located in rural and underserved regions. These campaigns
should aim to inform stakeholders about the range of training programs available
and highlight the tangible benefits of skill development. In addition, building strong
public-private partnerships can play a crucial role in expanding the reach of these
initiatives. Industry partners may be actively involved in co-developing training content
and participating in outreach activities, thereby ensuring that MSMEs are not only
aware of the opportunities under the converged schemes but are also well-equipped
to take full advantage of them.
7. Timeline
Months
02 46 81 01 21 41 61 8
Phase III
(12-18 months)
Phase II
(6-12 months)
Phase I
(0-6 months)
Formation of Steering Committee, Merging & coordination,
Upgrading MSME SAMPARK Portal, Resource allocation
Rollout of merged skill programs, Awareness campaigns,
Monitor!ng system setup, Feedback collection
Full scale implementation,
M&E and program adjustments
IMPLEMENTATION TIMELINE Achieving Efqciencies in MSME Sector through Convergence of Schemes 75
Benefits
The key benefits of the skill development convergence approach across all three cases are:
Resource Optimization
and Efficiency
2
3
4
1
Enhanced Access to
Comprehensive Skill
Sets
Targeted Support for
Diverse Beneficiary
Groups
Improved M&E
and Impact
Measurement
The skill development convergence approach offers key benefits by optimizing resources,
enhancing access to comprehensive skill sets, and providing tailored support for
diverse beneficiary groups. By integrating similar components across programs, such
as entrepreneurship and technical skills, the framework reduces duplication, maximizes
resource allocation, and streamlines administrative processes for cost-effective training
delivery. Beneficiaries gain access to a broader skill range, meeting the evolving needs of
MSMEs in both traditional and modern markets. Each convergence case targets specific
groups—like rural and women artisans or MSMEs needing technical skills—ensuring inclusive,
relevant training across all MSME clusters. Additionally, the unified framework enables
better monitoring and evaluation, allowing for real-time improvements and impactful skill
development that directly supports MSME growth and competitiveness.
Challenges
The key challenges faced in all three cases of skill development convergence are:
Fragmentation in Skill Development Schemes: The MSME sector comprises a diverse
range of entrepreneurs, including informal micro-enterprises, each with distinct skill
training needs. Multiple schemes currently address these needs, but their objectives, target
beneficiaries, and technical aspects vary. While certain components of skill development
may appear suitable for integration, a full merger may not be feasible due to these
structural differences. Additionally, efforts are already underway to enhance coordination
among key stakeholders, including the Ministry of MSME, the Ministry of Skill Development
and Entrepreneurship (MSDE), GeM, and SIDBI, to identify common ground and improve
alignment where possible. Nevertheless, can be pursued if: ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 76
A standardized framework is developed to accommodate sector-specific training
needs within a unified system.
Stakeholders collaborate to streamline skill development efforts while retaining the
flexibility needed for targeted interventions.
Coordination Across Multiple Schemes: Integrating skill development components from
various schemes like PMEGP, IC, ESDP, Tool Rooms, and Technology Centres involves
aligning different objectives, funding structures, and timelines. This can lead to coordination
difficulties and administrative delays.
Varied Beneficiary Needs: MSMEs in different sectors, such as rural artisans or high-
tech industries, have diverse skill requirements. Therefore, designing a unified training
approach that caters to all these groups without compromising relevance or quality can
be challenging.
Capacity Constraints in Implementing Agencies: Many training institutions, tool rooms,
and technical centers may lack the capacity to handle the increased scale and complexity
of delivering converged training programs, leading to inefficiencies or delays.
Resistance to Change: Traditional industries and artisans, particularly in rural areas, may
resist new training models or technologies. This can hinder the adoption of advanced
skills, limiting the overall impact of the convergence initiative.
RECOMMENDATION 4: PROCUREMENT AND MARKETING
SUPPORT (PMS) & INTERNATIONAL COOPERATION (IC)
The Procurement and Marketing Support includes various components such as awareness
programs, Vendor Development Programs (VDPs), workshops, reimbursement for modern
packaging and barcodes, promotion of e-commerce adoption, and retail outlet development.
Its primary focus is on reaching first-time beneficiaries and those in aspirational districts.
On the other hand, the International Cooperation scheme supports MSMEs through market
development assistance in trade fairs (limited to group participation, not individuals),
Capacity Building for First-time MSE Exporters (CBFTE), and an International Market
Intelligence Dissemination (IMID) framework. The target group for this scheme is generally
more aware and experienced in market exposure. While both schemes aim to provide
marketing assistance, they differ in their components and target beneficiaries as discussed
in the table below. Achieving Efqciencies in MSME Sector through Convergence of Schemes 77
Table 5.5: Comparison between Procurement and Marketing
Support (PMS) and International Cooperation (IC) Scheme
Aspect
Procurement and Marketing Support
(PMS)
International Cooperation (IC) Scheme
Objective
To enhance market access for
MSMEs by supporting participation
in domestic trade fairs, exhibitions,
e-commerce, and procurement
processes.
To facilitate MSME participation in
international trade events, promote
exports, and foster global collaboration
through technology exchange and
business partnerships.
Target
Audience
Micro, Small, and Medium
Enterprises (MSMEs), particularly
those seeking better market access
and government procurement
opportunities.
MSMEs, industry associations, and
export-oriented enterprises aiming to
expand into international markets and
adopt global best practices.
Support
Mechanism
Provides financial assistance for
MSMEs to participate in trade
fairs, B2B meetings, and vendor
development programs. Supports
e-commerce onboarding and
government procurement linkages.
Offers funding for MSMEs to attend
international exhibitions, trade
delegations, and technology exchange
programs. Encourages global
networking and collaboration.
Skill
Development
Conducts training programs on
marketing strategies, branding,
quality certification, and
procurement procedures.
Supports training in international
business practices, export compliance,
quality standards, and global trade
regulations.
Access to
Finance
Offers financial support for
exhibition space rental, stall setup,
and branding expenses.
Provides financial assistance for travel,
participation fees, and promotional
activities in international markets.
Technology
Integration
Encourages MSMEs to adopt digital
marketing, e-commerce platforms,
and advanced branding techniques
to improve sales.
Facilitates MSME exposure to global
technology trends, R&D collaborations,
and best manufacturing practices
through international partnerships.
Government
Support
Implemented by the Ministry of
MSME through various support
programs, including GEM
(Government e-Marketplace)
integration.
Managed by the Ministry of MSME,
supporting industry associations and
enterprises in forming global trade
alliances and technology partnerships.
Therefore, it is proposed to integrate the PMS and IC Schemes into a unified framework
with two key components: Domestic Marketing Assistance and International Marketing
Assistance. This approach will simplify MSMEs’ access to support while fostering
a comprehensive market development strategy that evolves with their needs. By
optimizing processes and resources, this integrated model will enhance efficiency and
synergy, ultimately strengthening government support as MSMEs expand from local to
global markets. Also, MSMEs that aim to transition from domestic marketing support to
international marketing support can do so seamlessly through a unified framework. Achieving Efqciencies in MSME Sector through Convergence of Schemes 78
The proposal emphasizes convergence and not merger of the schemes, ensuring that the
PMS and IC Schemes continue to serve their respective target groups while functioning
within a cohesive framework that maximizes their collective impact.
Convergence Framework
To streamline marketing support for MSMEs, a dedicated Marketing Wing is proposed,
comprising two key sub-components:
Domestic Marketing AssistanceInternational Marketing Assistance
Marketing
Assistance Wing
Product Quality, packaging, Brand promotion, e-commerce, adoption of bar code,
Workshops, Seminars
1.Capacity Building through
ESDP
2.Organizing and participating
in domestic trade
fairs/exhibitions
3.Domestic procurement
1.Capacity Building through ESDP for
first-time exporters
2.Organizing and participating in
international trade fairs/ exhibitions
3.Framework for International Market
Intelligence Dissemination
Features of Domestic Marketing Assistance wing:
The Domestic Marketing Assistance wing is proposed to focus on facilitating the
participation of MSMEs in national-level exhibitions, trade fairs, and buyer-seller meets
across the country. As part of this initiative, support may be extended to help MSMEs
improve branding, enhance product development, and access e-commerce platforms to
expand their domestic market reach. The wing may assist in promoting linkages between
MSMEs and large-scale industries, as well as government departments, by encouraging
participation in procurement processes through platforms such as the Government
e-Marketplace (GeM). Additionally, financial support may be provided to enable MSMEs
to set up stalls at domestic trade events, with the overall objective of strengthening their
visibility and market presence within India. Achieving Efqciencies in MSME Sector through Convergence of Schemes 79
Features of International Marketing Assistance wing:
The International Marketing Assistance wing can be designed to support MSMEs in accessing
global markets by facilitating their participation in international trade fairs, business-to-
business (B2B) events, and buyer-seller meets abroad. It can offer financial subsidies to
help enterprises explore international markets, obtain product certifications, and undertake
export promotion activities. To prepare MSMEs for global competition, this wing should
provide export readiness programs aimed at enhancing their capabilities in compliance,
quality standards, and documentation. Additionally, both financial and logistical support
can be extended for international marketing initiatives, including promotional events and
participation in trade delegations to key overseas markets.
Implementation Framework
The proposed implementation framework for the Marketing Assistance Wing focuses on
operationalizing the Domestic Marketing Assistance and International Marketing Assistance
components to effectively support MSMEs. Relevant MSME policy-making bodies, in
collaboration with state governments, industry experts, marketing professionals, external
evaluators, and other key stakeholders, will play a crucial role in designing, executing,
and monitoring marketing support interventions. This framework consists of several key
elements:
1. Governance Structure
Creation of the wing, comprising representatives from relevant government departments,
industry associations, and MSME stakeholders to oversee the implementation of
the unified marketing assistance framework. Form dedicated teams for Domestic
and International Marketing Assistance, each responsible for program development,
execution, and evaluation.
2. Resource Allocation and Budgeting
A balanced and responsive approach to resource allocation is advisable, ensuring
that funding is distributed equitably between domestic and international components
in accordance with program demand and actual uptake. This ensures that both
segments receive the necessary support to grow and scale effectively. Additionally, it
is recommended to explore collaborative partnerships with private sector entities and
international organizations to secure supplementary funding and technical support.
Such partnerships can enhance the sustainability and reach of marketing initiatives,
while also bringing in global best practices and innovative models of implementation.
3. Program Development and Design
Domestic Marketing Assistance:
In enhancing domestic marketing assistance for MSMEs, it would be beneficial to
develop a comprehensive calendar of key national events, exhibitions, and trade fairs
where MSMEs can showcase their products. Alongside this, establishing a streamlined
and accessible application process for financial support will help MSMEs participate
more effectively in these events. Strengthening collaboration with design experts and Achieving Efqciencies in MSME Sector through Convergence of Schemes 80
marketing professionals is encouraged to facilitate specialized workshops and offer
one-on-one consulting on branding strategies and product improvements. Partnerships
with leading e-commerce platforms may also be explored, along with providing MSMEs
with the necessary tools, training, and handholding to develop and maintain a robust
online presence. Additionally, forging linkages with large-scale industries can help
create procurement opportunities, while platforms like the Government e-Marketplace
(GeM) may be leveraged to connect MSMEs with government buyers.
International Marketing Assistance:
For international marketing assistance, it is advisable to begin by identifying and
prioritizing key global markets that align with the strengths and potential of Indian
MSMEs. Financial assistance schemes could be designed to support enterprises aiming to
explore these markets. Targeted training programs focusing on international compliance
requirements, market research techniques, and export documentation processes would
help prepare MSMEs for global trade. Strategic partnerships with logistics and shipping
companies could be considered to provide MSMEs with preferential rates and logistical
support during international outreach efforts. Moreover, organizing trade missions to
selected countries, supported by both logistical coordination and financial subsidies,
can significantly enhance the global visibility and competitiveness of Indian MSMEs.
4. Communication and Outreach
It is advisable to design and implement comprehensive awareness campaigns to
effectively inform MSMEs about the newly established unified marketing assistance
framework. These campaigns should communicate the types of support available under
both domestic and international components, along with step-by-step guidance on
how to access these resources. To further support MSMEs in navigating the system,
a dedicated single-point contact mechanism—such as a national helpline—may be
established. This helpline can serve as a reliable source of information and assistance,
addressing queries related to eligibility, application procedures, and program benefits,
thereby ensuring timely and accurate support for MSMEs across the country.
5. Monitoring and Evaluation
To ensure the effectiveness of the unified marketing assistance framework, it is
recommended to develop a set of clearly defined KPIs for both the domestic and
international components. These indicators may include the number of MSMEs supported
through the program, measurable increases in sales and market reach, participation
rates in training sessions and promotional events, and other relevant impact metrics.
Establishing such performance benchmarks will enable continuous monitoring and
facilitate evidence-based decision-making. In parallel, a structured feedback mechanism
should be implemented to gather insights directly from participating MSMEs regarding
the relevance and utility of the assistance provided. Incorporating MSME feedback into
program design will help refine strategies, improve delivery mechanisms, and ensure
the initiatives remain responsive to the evolving needs of the sector. Achieving Efqciencies in MSME Sector through Convergence of Schemes 81
6. Timeline
Months
02 46 81 01 21 41 61 8
Phase III
(12-18 months)
Phase II
(6-12 months)
Phase I
(0-6 months)
Focus on planning,governance,stakeholderengagement,
developing and designing the program components
Conduct communication and outreach to raise awareness of the programs;
Pilot the programs, collect feedback, and refine them based on insights.
Full-scale implementationof Marketing
Assistance Wing, M&E and program adjustments
IMPLEMENTATION TIMELINE
Benefits
The key benefits of the above-mentioned convergence approach are:
Simplified Acces
2
3
4
1
Efficient fund
utilization
Integrated Marketing
Strategy
Scalability
The convergence of the domestic and International marketing-based schemes into a
unified framework offers several key benefits for MSMEs. Firstly, it provides simplified
access, enabling MSMEs to engage with a single point of contact for all their market
promotion activities, thus eliminating the confusion and complexity of navigating multiple
schemes. This consolidation not only streamlines the process but also enhances efficiency
by reducing administrative costs and complexity associated with overlapping components.
As a result, resources can be utilized more effectively, ensuring that support reaches
the intended beneficiaries. Moreover, the integrated marketing strategy aligns domestic
and international marketing efforts, creating a comprehensive market access strategy
that caters to the diverse needs of various MSMEs. This holistic approach allows for
scalability, as enterprises can begin by leveraging domestic market assistance to build Achieving Efqciencies in MSME Sector through Convergence of Schemes 82
their capabilities and confidence before transitioning to international marketing support as
they grow. Ultimately, this convergence fosters an environment where MSMEs can thrive,
adapt, and compete effectively in both local and global markets.
Challenges
Different Target Groups: The primary focus of PMS is on reaching first-time beneficiaries,
including those from aspirational districts, to enhance their domestic market reach. The
IC Scheme, on the other hand, is designed to support market development for MSMEs
at an international level. The MSMEs benefiting from IC generally have higher awareness
and exposure compared to those under PMS. Nevertheless, convergence can be explored
if a tiered support mechanism is developed, where PMS focuses on domestic market
preparedness while IC provides advanced international market support. A sequential
progression model could be introduced, allowing MSMEs to transition from PMS to IC
once they meet specific eligibility criteria.
Administrative Disruptions: Merging the two schemes may result in initial administrative
disruptions. Existing bureaucratic structures may need to be realigned, and staff may need
training to adapt to the unified scheme’s new processes and objectives, which could lead
to delays and resistance.
Resource allocation: Deciding how to allocate resources between domestic and
international components could be a challenge. The demands of international marketing
activities often require substantial funding, potentially leading to an imbalance where
resources for domestic support are reduced.
Barriers for Smaller Enterprises: Smaller or newly established MSMEs may feel overwhelmed
by a single scheme that encompasses both domestic and international components. They
may find it challenging to understand and access the appropriate support, especially if
they are not yet ready for international exposure.
Market Dynamics: The dynamics of domestic and international markets are vastly different.
Strategies that work domestically may not be applicable internationally. Designing a unified
scheme that can effectively adapt to both sets of market conditions without compromising
the quality of support could be difficult. Therefore, it is very important to design the
scheme with flexible options so MSMEs can choose the type of support that fits their
current stage and requirements. The scheme guidelines should provide clear guidelines,
establish clear roles, responsibilities, and communication channels, allocate resources in a
balanced manner, and review periodically to ensure neither component is underfunded.
RECOMMENDATION 5: MSME INNOVATIVE & A SCHEME
FOR PROMOTING INNOVATION, RURAL INDUSTRIES &
ENTREPRENEURSHIP (ASPIRE)
It has been observed that the ASPIRE scheme has relatively low awareness despite being an
established scheme. On the other hand, MSME Innovative, which offers similar support for
promoting innovation and entrepreneurship, is widely recognized and utilized by MSMEs.
Given the overlap in objectives and support structures between these two schemes, it
is proposed to mere ASPIRE with MSME Innovative. The ASPIRE scheme, which aims to
promote rural entrepreneurship and innovation, has experienced limited uptake due to Achieving Efqciencies in MSME Sector through Convergence of Schemes 83
gaps in awareness, outreach, and alignment with market realities. By converging it with
MSME Innovative—which has broader visibility and greater adoption—the resources of
ASPIRE can be better utilized.
The MSME Innovative scheme is an amalgamation of three former schemes—Incubation,
Design, and IPR Schemes of the Ministry of MSME
92
. It is a component of the MSME
Champions Scheme and was established to provide a holistic approach by unifying,
synergizing, and converging three sub-schemes under a common objective. Similarly,
the ASPIRE scheme promotes innovation in agro and rural-based enterprises through
incubators. Integrating ASPIRE with MSME Innovative can create a more cohesive and
effective framework to support innovation across all MSMEs, including the agro-rural
sector. The table below provides details of the similarities between both schemes:
Table 5.6: Comparison between MSME Innovative and ASPIRE
AspectMSME InnovativeASPIRE
Objective
Promote innovation and
entrepreneurship in MSMEs.
Supporting Business Incubators
(BI).
Promote innovation, and
entrepreneurship in the agro and rural-
based industries. Setting up Livelihood
Business incubators (LBI).
Target
Audience
MSMEs across sectors
Agro- Rural entrepreneurs, and start-
ups
Support
Mechanism
Financial support, incubation,
hand-holding, and R&D assistance
Livelihood Business Incubators (LBIs),
financial support, hand-holding and
R&D assistance
Skill
Development
Provides training to enhance
MSME capabilities
Focus on entrepreneurship and skill
development through incubators
Access to
Finance
Provides grants and funding
opportunities for procuring plant
& machinery, nurturing ideas – HI
& BI.
Offers financial assistance to LBI, HI
& MI for procuring plant & machinery,
nurturing ideas and operational
expenses.
ASPIRE Fund of Funds with SIDBI
used
Technology
Integration
Promotes the adoption of
advanced technologies
Adoption of new technologies in the
agro-rural sector.
Government
Support
Ministry of MSMEMinistry of MSME
Both schemes—MSME Innovative (Incubation) under MSME Champions and ASPIRE—share
the same objective of fostering innovation through incubation, utilizing a similar funding
mechanism through Host Institutes. However, ASPIRE specifically focuses on the agro-rural
sector, while MSME Innovative targets the entire MSME spectrum. Another difference is
that ASPIRE has a separate Fund of Funds managed by SIDBI to invest in early-stage
enterprises and start-ups within the agro-rural sector.
92 GUIDELINES/ MSME INNOVATIVE/ 2021-2022 Achieving Efqciencies in MSME Sector through Convergence of Schemes 84
Convergence Framework
MSMEInnovative
ASPIRE
Incubation
Design
IPR
ASPIRE could be integrated into MSME Innovative as a special category dedicated to
agro-rural enterprises. The existing corpus fund available under the ASPIRE Fund of Funds
until the current financial year can be utilized as it is. However, from the upcoming financial
years, a certain percentage of the budget of MSME Innovation can be reserved specifically
for incubators related to the agro and rural economy.
While ASPIRE primarily focuses on agro-based incubators, its integration within MSME
Innovative will not limit the scope to agriculture alone. Instead, it will broaden access
to advanced technology incubation by leveraging the already diverse framework of
MSME Innovative. This approach will ensure a balanced, sector-agnostic model while
still addressing the specific needs of agro-based startups.
Implementation Framework
Authorities responsible for MSME development, along with key functionaries of
ASPIRE and MSME Innovation, relevant financial institutions, state governments,
and external evaluators, will play critical roles in designing, executing, financing, and
assessing this integration. The implementation framework for integrating ASPIRE
into MSME Innovation as a special category for agro-rural enterprises would be:
1. Strategic Planning and Budget Allocation
It is important to begin by clearly outlining the objectives for integrating ASPIRE
within the MSME Innovation framework, with a specific focus on supporting agro-rural
enterprises. As part of the budget planning process, a defined percentage of MSME
Innovation’s budget should be allocated to agro-rural-focused incubators starting
from the upcoming financial year. During the transition period, the existing corpus
under ASPIRE’s Fund of Funds can be allocated to support agro-rural incubators. A
structured plan should also be developed for budget allocation post-convergence,
ensuring that Host Institutes (HIs), Livelihood Business Incubators (LBIs), and Mentor
Institutes (MIs) that specialize in agro-rural enterprises continue to receive targeted
support and maintain program continuity. Additionally, it is advisable to conduct
consultations with key stakeholders, including government bodies, incubators, and rural
enterprise representatives, to align on program objectives and implementation needs. Achieving Efqciencies in MSME Sector through Convergence of Schemes 85
2. Establish the Agro-Rural Enterprise Category in MSME Innovation
A dedicated category under MSME Innovation should be created specifically for agro-
rural enterprises. Within this category, eligibility criteria and operational guidelines
need to be established to direct funding and support to Host Institutes, Livelihood
Business Incubators, and Mentor Institutes that focus on agro-rural industries. To
ensure broad awareness and uptake, an outreach campaign could be launched to
inform potential incubators and MSMEs operating in agro-rural sectors about this new
support mechanism.
3. Operationalize and Support Agro-Rural Incubators
Disbursement of grants could commence for Host Institutes, LBIs, and MIs based
on their eligibility and alignment with the goals of supporting agro-rural enterprises.
In parallel, training and capacity-building programs can be organized to strengthen
the capabilities of these incubators in serving agro-rural communities effectively. A
monitoring framework needs to be established to assess the early impact and overall
progress of the incubators receiving support under this initiative.
4. Review, Feedback, and Budget Continuity (Ongoing/Annually)
At the end of each financial year, a review could be conducted to evaluate the
performance and impact of the agro-rural category within the MSME Innovation
program. Feedback should be gathered from participating incubators and supported
MSMEs to identify areas for improvement and enhance program effectiveness. Based
on the outcomes of the review, the reserved budget percentage allocated to agro-
rural enterprises within MSME Innovation may be adjusted to ensure that targeted and
continuous support is sustained over time.
5. Timeline:
02 46 81 0
Months
12 14 16 18
Phase IV
(Annual)
Phase III
(10-15 months)
Phase II
(5-10 months)
Phase I
(0-5 months)
Strategie Planning and
Program Realignment
Institutional Coordination
and Governance Mechanism
Program Implementation and
Cluster Identification
Monitoring and
Evaluation
IMPLEMENTATION TIMELINE Achieving Efqciencies in MSME Sector through Convergence of Schemes 86
Benefits
The key benefits of the proposed convergence approach are:
Broader Access to
Resources
2
3
4
1
Enhanced Digital
Transformation
Integrated Support
and Expertise
Focused Financial
Support
The convergence of ASPIRE with MSME Innovative brings several key benefits for agro-
rural industries. First, it enables broader access to essential resources, such as support
for Design and Intellectual Property Rights (IPR), which helps agro-based enterprises
develop unique products and protect their innovations. Additionally, agro-rural businesses
stand to benefit from MSME Champions’ digitization initiatives, giving them greater access
to digital tools and platforms that can improve productivity, expand market reach, and
enhance adaptability in today’s economy. The merger also integrates ASPIRE into a larger,
comprehensive support system within MSME Innovative, granting agro-rural enterprises
access to a wider range of expertise and resources, ultimately streamlining their experience
in receiving aid. Lastly, the inclusion of a reserved budget for agro-rural initiatives ensures
sustained and focused financial support for Host Institutes, Livelihood Business Incubators
(LBIs), and Mentor Institutes (MIs), enabling them to grow without competing for resources
allocated to other sectors.
Challenges
Risk of Dilution of Focus: There is a potential risk that the distinct focus of ASPIRE on
agro-rural industries may be diluted within the broader framework of MSME Innovative.
Ensuring dedicated resources and attention to agro-rural needs will be essential.
Complex Resource Management: Allocating resources specifically for agro-rural enterprises
within a larger MSME budget could create administrative complexities. Clear guidelines
and oversight, possibly managed by SIDBI, would be required to avoid resource diversion
to other areas. Achieving Efqciencies in MSME Sector through Convergence of Schemes 87
Maintaining Specialized Support for LBIs: The merger could make it challenging to retain
ASPIRE’s unique focus on Livelihood Business Incubators (LBIs) essential for agro-rural
development. SIDBI’s continued involvement in managing the reserved budget would help
maintain this targeted support.
Potential Operational Adjustments for Stakeholders: With ASPIRE integrated, stakeholders
accustomed to its standalone operation might face initial adjustments to align with MSME
Innovative processes. Transition support and training will be needed to facilitate a smooth
adaptation to the new structure. 88
WAY FORWARD:
ENSURING EFFECTIVE AND INCLUSIVE MSME SUPPORT
MECHANISMS
Considering feedback from stakeholders and research findings, it is recommended
that a cautious approach be taken regarding the merging of existing MSME schemes,
particularly those created for specific target groups. Maintaining the integrity of targeted
initiatives like the National SC/ST Hub and the Promotion of MSMEs in the North Eastern
Region (NER) is crucial, as these programs address unique socio-economic and cultural
challenges. Merging such schemes could dilute their effectiveness and hinder their ability
to provide focused support to marginalized communities. Similarly, programs with a
broad beneficiary base, like the Prime Minister’s Employment Generation Programme
(PMEGP), should remain untouched, as they serve a diverse array of MSMEs and play an
essential role in job creation and economic growth. Their large-scale impact should not
be compromised through convergence. For schemes where convergence is not possible,
enabling collaboration among different programs could be the ideal approach. This can be
achieved through joint workshops, training sessions, and outreach efforts that maximize
each scheme’s impact while ensuring that the distinct needs of specific groups are met.
Additionally, training and resources for administrators should be prioritized to enhance
their understanding of the unique challenges faced by various communities, enabling them
to provide more tailored support and interventions.
However, for schemes with similar objectives and delivery mechanisms, convergence
should be prioritized, allowing for optimal resource utilization and reducing administrative
redundancies. This process must be accompanied by a robust mechanism to prevent
inefficiencies and ensure that the intended beneficiaries continue to receive targeted
support. To facilitate effective implementation, a coordinated governance structure
should be established to oversee the transition, address operational challenges, and track
outcomes. 89
ANNEXURE I
MOMSME SCHEMES:
S No. SchemesGuidelines
1 MSME Champions
https://dcmsme.gov.in/CLCS_TUS_Scheme/MSME%20
Innovative%20Scheme%20Guidelines.pdf https://www.
dcmsme.gov.in/schemes/clcs-tus/LEAN-Operational-
Guidlelines.pdf https://zed.msme.gov.in/uploads/Subsidy_
Women.pdf
2
Raising and Accelerating
MSME Performance
(RAMP)
https://www.nimsme.org/news-article/raising-accelerating-
msme-performance-ramp-scheme
3
International Cooperation
(IC) Scheme
https://ic.msme.gov.in/IC_APP/WriteReadData/GuideLine/
Final%20and%20approved%20IC%20Scheme%20
Guidelines-2021.pdf
4
Assistance to Training
Institutions (ATI) Scheme
https://msme.gov.in/sites/default/files/PDF%20
REVISED%20ATI%20GUIDELINES%20English%20
1.9.2016%20%281%29.pdf
5
Technology Centres
Scheme
https://dcmsme.gov.in/CLCS_TUS_Scheme/
new-Technology-Centers/Scheme_Guidelines.
aspx#:~:text=by%20these%20Centres-,Guidelines,the%20
vacant%20built%20up%20spaces.
6
Marketing Assistance
Scheme
https://msme.gov.in/sites/default/files/MASCHEME-
New-18112014.pdf
7
Promotion of MSME in
NER and SIKKIM
https://www.dcmsme.gov.in/schemes/Revised_Guidelines_
on_31May2022.pdf
8
Self-Reliant India (SRI)
Fund
https://dcmsme.gov.in/Final%20SRI%20Operating%20
Guidelines%20%20approved%20by%20Minister%20%20
17%2008%202021.pdf
9
Credit Guarantee Scheme
for Micro & Small
Enterprises (CGTMSE)
https://www.cgtmse.in/Default/
ViewFile/?id=1673390907997_CGTMSE%20-%20
Scheme%20Document%20CGS%20I_updated%20as%20
on%20Jan%2010,%202023.pdf&path=Page
10
Procurement and
Marketing Support (PMS)
Scheme
https://dcmsme.gov.in/OM%20&%20PMS%20Scheme%20
Guidelines.pdf ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 90
11
Prime Minister’s
Employment Generation
Programme (PMEGP)
https://www.kviconline.gov.in/pmegp/pmegpweb/docs/
pdf/PMEGPscheme.pdf
12
Entrepreneurship Skill
Development Programme
(ESDP) Scheme
https://msmedi.dcmsme.gov.in/Manuals/Approved%20
ESDP%20Guidelines_new.pdf
13
A Scheme for
Promotion of Innovation,
Rural Industries and
Entrepreneurship (ASPIRE)
https://aspire.msme.gov.in/WriteReadData/DocumentFile/
ASPIRE_NEW.pdf
14
Scheme of fund for
regeneration of traditional
industries (SFURTI)
https://sfurti.msme.gov.in/WriteReadData/Circular/
SFURTI_NEW.pdf
15
Micro & Small Enterprises
Cluster Development
Programme (MSE-CDP)
Scheme
https://www.dcmsme.gov.in/schemes/New-Guidelines.pdf
16
National SC-ST Hub
Scheme
https://www.scsthub.in/sites/default/files/NSSH_
Guidelines_o.pdf
17Coir Vikas Yojana
https://msme.gov.in/sites/default/files/Revised_Operation_
Guidelines_of_CVY.pdf
18
Khadi Gramodyog Vikas
Yojana
https://msme.gov.in/sites/default/files/
RevisedoperationalGuidelinesofGVY.pdf
19
PM Vishwakarma -
Enabling Artisans and
Craftspeople to Build
Enterprises
https://jrgbank.in/tenders/PM%20VISHWAKARMA-
SCHEME%20GUIDELINES.pdf 91
ANNEXURE II
STATE SCHEMES:
Telangana:
S. NoScheme NameGuidelines
1
T-IDEA (Telangana State
Industrial Development and
Entrepreneur Advancement)
Incentive Scheme, 2014
https://industries.telangana.gov.in/Li-
brary/2015INDS_MS77.pdf
2
T –PRIDE(Telangana State
Programme for Rapid Incubation
of Dalit Entrepreneurs Incentive
Scheme)
https://industries.telangana.gov.in/Li-
brary/2015INDS_MS78.pdf
3
Telangana State Industrial Project
Approval and Self-Certification
System (TS-iPASS)
https://ipass.telangana.gov.in/viewpdf.aspx-
?enc=olSBrXl6rl1gh1Zl/gAtCIkxOo/1mEK3ZEGd-
edYO3dbgHlf+VSWFL6LVs+mm8Rg6nTRHe7ix-
LA1Uzvt6vtEOd7yNOlXTsEGt9qK4Uv6FedkHCt/
kkWVR29+JYNYHIZscBFbJdq58wnda+4yAdp-
gLl0kO7S3ylF5rB2c2iHYP+7tg9EjvNHByfVEv-
NylEWGg+UoSdX02uK/fnSHrc+5C7QINOm-
v0Fbs9y8Mef1uZRoL8=
4
Scheme for economic
development of ST entrepreneurs
https://startup.telangana.gov.in/wp-content/up-
loads/2021/06/cmstei_scheme_details.pdf
5 Self Employment Scheme
https://industries.telangana.gov.in/selfemploy-
ment.aspx
6 Bank linked schemeshttps://tsmfc.in/schemeinfo.php?id=5
7 Suvidha Incubation
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
8
T-Fund (Telangana Innovation
Fund)
https://www.startupindia.gov.in/content/dam/
invest-india/Templates/public/state_startup_pol-
icies/Telangana-Innovation-Policy-Issued-GO.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 92
S. NoScheme NameGuidelines
9
The Telangana Handloom Weavers
Thrift Fund Saving and
Security Scheme (THWTFSSS)
“Nethannaku Cheyutha”.
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
10
Common fiscal incentives for all
companies
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
Maharashtra:
S.No Scheme NameGuidelines
1
Industrial Promotion Subsidy (IPS)
https://maitri.mahaonline.gov.in/PDF/Industrial%20 Promotion%20Subsidy%20(IPS)%20under%20Indus- trial%20Policy%20-%20modification%20under%20 Goods%20and%20Services%20Tax%20(GST)%20 regime.pdf
2
Interest Subsidy
Incentive
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
3
Exemption from Electricity Duty
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
4 Waiver of Stamp Duty
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
5 Power tariff Subsidy
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
6
Additional Incentives for Strengthening MSMEs
http://di.maharashtra.gov.in/_layouts/15/doistaticsite/ English/investors_guide_psi.html
West Bengal:
S.No Scheme NameGuidelines
1 Bhabisyat Credit Card Scheme
https://wbmsme.gov.in/sites/default/files/cms/ circularpdf/bhabishyat_credit_card.pdf
2 Karma Sathi Prakalpa https://wbxpress.com/files/2021/01/1825-MSMET.pdf
3 Banglashree Scheme
https://www.wbsidcl.in/assets/contents/incentive_ scheme_4420_msmet-09112023.pdf
4
Interest Subsidy on Term Loan (IS)
https://msme.icai.org/wp-content/uploads/2022/12/ West-Bengal-1.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 93
S.No Scheme NameGuidelines
5 Textile Incentive Scheme
https://msme.icai.org/wp-content/uploads/2022/12/
West-Bengal-1.pdf
6 Finance Clinichttps://wbmsmet.gov.in/ki_ies_finclncs
7
Incentive Scheme
2020 for approved
Industrial Park
https://wbmsme.gov.in/sites/all/themes/anonymous/
pdf/SAIP%202020_Notification.pdf
8
Rural
Entrepreneurship Hub
https://wbmsme.gov.in/sites/all/themes/anonymous/
pdf/reh_for_website.pdf
9 Silpa Disha
https://msme.icai.org/wp-content/uploads/2022/12/
West-Bengal-1.pdf
10 Silpa Sathihttps://silpasathi.wb.gov.in/msme_Incentives
11
State Capital Investment
Subsidy
https://wbmsme.gov.in/sites/all/themes/
anonymous/pdf/SAR_642_MS___MAT_Department_
Revenuey_31.07.2020_.pdf
Uttar Pradesh:
S.No Scheme NameGuidelines
1 ODOP Scheme
https://abhinavpahal.nic.in/ uploads/0d7X2fcBcYODOP.pdf
2
Common Facility Centre (CFC) Scheme
https://odopup.in/site/writereaddata/ siteContent/201904171130237521cfc_scheme.pdf
3
Marketing Development Assistance Scheme
https://epbupindia.in/Home/MDA
4
Skill Development and Toolkit Distribution Scheme
https://odopup.in/site/writereaddata/siteContent/201 905081050489239odop-sceam.pdf
5
Uttar Pradesh Chief Minister Youth Self Employment Scheme
https://up.nic.in/news/launch-of-mysy- mukhyamantri-yuva-swarojgar-yojana-portal-for- directorate-of-industries-and-enterprise-promotion- government-of-uttar-pradesh/
6
Scheme for Promoting Establishment of Private Industrial Parks 2017
https://invest.up.gov.in/wp-content/themes/ investup/pdf/Private-Industrial-Park_Scheme.pdf
7 Land Incentives
https://msme.icai.org/wp-content/uploads/2021/06/ UP-MSME-Policy.pdf
8 Land Use Conversion
https://msme.icai.org/wp-content/uploads/2021/06/ UP-MSME-Policy.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 94
S.No Scheme NameGuidelines
9
Special Purpose Vehicles
(SPV) Formation
https://msme.icai.org/wp-content/uploads/2021/06/
UP-MSME-Policy.pdf
10 Stamp Duty Exemption
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
11
Employee Provident Fund
(EPF) Reimbursement
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
12 Capital Interest subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
13 Infrastructure interest subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
14
Industrial quality development
subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
15 Land conversion waiver
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
16
Electricity charges
reimbursement
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
17
A Small, Medium Enterprise
Venture Capital Fund
(SMEVCF)
https://invest.up.gov.in/wp-content/themes/
investup/pdf/Medium-Small-Micro-Enterprise-
brochure.pdf
18
Vishwakarma Shram Samman
Yojna
https://upid.ac.in/vishwakarma-shram-samman-
yojana-vssy/
Gujarat:
S.No Scheme NameGuidelines
1 Gujarat Industrial Policy 2020
https://ic.gujarat.gov.in/documents/ commondoc/2020/Industrial-Policy2020.pdf
2
Gujarat MSME Export Promotion Scheme
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf
3
Assistance of Capital Investment Subsidy
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf
4
Assistance for Interest Subsidy for Manufacturing & Service Sector
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 95
S.No Scheme NameGuidelines
5
Assistance for Quality
Certification (ERP Assistance)
https://slbcgujarat.in/wp-content/uploads/2021/04/
Compendium-of-schemes-and-guidelines-for-MSME-
sector-Final.pdf
6
Net SGST
Reimbursement
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
7
Assistance for Quality
Certification (Quality
certification)
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
8
Financial Support to MSMEs in
ZED Certification
https://ic.gujarat.gov.in/documents/
commondoc/2023/Draft%20ZED%20Guideline.pdf
9
EPF
Reimbursement
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
10
Assistance in implementation
of Information and
Communication Technology
https://ic.gujarat.gov.in/documents/
commondoc/2023/Draft%20ICT%20Guideline.pdf
11
Assistance for Technology
Acquisition
https://ic.gujarat.gov.in/assistance-for-technology-
acquisition.aspx
12
Assistance for Patent
Registration
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
13
Assistance for saving in
consumption of Energy and
Water
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
14
Rehabilitation of
Sick Enterprises
https://imd.gujarat.gov.in/Document/2016-7-29_650.
pdf
15 Power connection charges
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
16 reimbursement of rent
17
Assistance for raising Capital
through SME Exchange
https://ic.gujarat.gov.in/documents/pagecontent/
Sme%20Final%20Guideline_24-10-2017-gen.pdf
Tamil Nadu:
S.No Scheme NameGuidelines
1
Grant of Quality Certification Reimbursement of Charges (Qcert)
https://www.msmetamilnadu.tn.gov.in/pdf/ msme_e_35_2019.pdf
2
Promotion of Energy Audit and Conservation of Energy (PEACE)
https://msmeonline.tn.gov.in/incentives/pdf/peace_ ea_cye.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 96
Achieving Efficiencies in MSME Sector through Convergence of Schemes
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026
S.No Scheme NameGuidelines
3
New Entrepreneur Cum
Enterprise Development
Scheme (NEEDS)
https://www.dictiruchi.in/needs.pdf
4
Unemployed Youth
Employment Generation
Programme (UYEGP)
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
5
Annal Ambedkar Business
Champions Scheme (AABCS)
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
6
MSME Skill Training and
Employment Scheme
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
7
Subsidy for Fund Raising from
SME Exchange
https://www.msmeonline.tn.gov.in/incentives/html_
cye_sme.php
8
Incentive for Patent
Registration/ Trade Mark
Registration / Geographical
Indications
https://www.msmeonline.tn.gov.in/incentives/html_
cye_ipr.php
9
Reimbursement of Stamp Duty
& Registration Charges
https://www.msmeonline.tn.gov.in/incentives/html_
cye_stamp.php
10 Pay Roll Subsidy
https://www.msmeonline.tn.gov.in/incentives/html_
cye_pay.php
11
Power Subsidy-
LTPT
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
12 Generator Subsidy
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
14
Subsidy for Fund
Raising
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
15
BACK - ENDED INTEREST
SUBSIDY
https://www.msmetamilnadu.tn.gov.in/beis.
php#:~:text=Back%2Dended%20interest%20
subsidy%20of,Fund%20Trust%20Scheme%20
(CGTMSE). Achieving Efficiencies in MSME Sector through Convergence of Schemes
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026 ACHIEVING
EFFICIENCIES IN
MSME SECTOR
THROUGH
CONVERGENCE
OF SCHEMES DISCLAIMER:
Administrative Staff College of India, Hyderabad
has received financial assistance under the Research
Scheme of NITI Aayog to prepare the report. While
due care has been exercised to prepare the report
using the data from various sources, NITI Aayog
does not confirm the authenticity of data and
accuracy of the methodology to prepare the report.
NITI Aayog shall not be held responsible for the
findings or opinions expressed in the document.
This responsibility completely rests with ASCI ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- iii
AUTHORS
Administrative Staff College of India (ASCI)
Principal Investigator
Dr. Karnak Roy, Associate Professor, ASCI
Dr. Sweety Pandey, Assistant professor, ASCI
karnak.roy@asci.org.in, sweety.pandey@asci.org.in
Research Team
Ms. Surabhi Mishra, Senior Research Associate, ASCI
Dr. Raman Ghosh, Assistant Professor, ASCI
Ms. Krishnapriya Deshapaka, Research Intern, ASCI
STUDY ADVISORS
Dr. Nirmalya Bagchi, Professor and Director, ASCI Business School
Dr. Valli Manickam, Dean of Research Studies (DoRS), ASCI
Amit Mohan Prasad, retd. IAS, Additional Chief Secretary, Government of Uttar
Pradesh ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- v
CONTENTS
Disclaimer.................................................................................................................................................................ii
Author’s page........................................................................................................................................................iii
Preface.....................................................................................................................................................................vii
Acknowledgement...............................................................................................................................................ix
Message, Vice Chairman, NITI Aayog.........................................................................................................xi
Message, Member, NITI Aayog....................................................................................................................xiii
Message, Chief Executive Officer, NITI Aayog.......................................................................................xv
Message, Programme Director, NITI Aayog..........................................................................................xvii
List of Abbreviations........................................................................................................................................xix
List of Tables.....................................................................................................................................................xxiii
List of Figures...................................................................................................................................................xxiv
Executive Summary.........................................................................................................................................xxv
1. MSMEs as Growth Engines of the Economy.........................................................01
1.1. Role of Micro, Small, and Medium Enterprises (MSMEs) in
the Economic Development............................................................................................................02
1.2. Micro, Small, and Medium Enterprises (MSMEs) and
its Attached Organizations...............................................................................................................06
2. The Case for Convergence:.......................................................................................09
2.1. Overview of Micro, Small, and Medium Enterprises (MSMEs) Schemes....................10
2.2. The Need of Convergence for Sustainable Growth..............................................................12
3. Convergence Models and Best Practices................................................................ 15
3.1. Framework for Effective Convergence:........................................................................................16
3.1.1. Information Convergence...........................................................................................................16
3.1.2. Process Convergence..................................................................................................................16
3.2. Best Practices.............................................................................................................................................17
3.2.1. Best Practices for Information Convergence................................................................. 17
3.2.2. Best Practices for Process Convergence....................................................................... 22
4. Insights on Convergence Opportunities................................................................. 33
4.1. Methodology...............................................................................................................................................34
4.2. Ministry of MSME Schemes: Similarities and Uniqueness..................................................36
4.3. Insights from Stakeholder Consultations...................................................................................50
5. Recommendations for Convergence and Way Forward....................................59
Recommendation 1: Centralized Portal for MSMEs:...................................................................... 60 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- vi
Contents
Recommendation 2: Micro and Small Enterprises -
Cluster Development Programme’ (MSE-CDP) and Scheme of
Fund for Regeneration of Traditional Industries (SFURTI)........................................................65
Recommendation 3: Converge Skill Development Programmes.............................................71
Recommendation 4: Procurement and Marketing
Support (PMS) & International Cooperation (IC)............................................................................ 78
Recommendation 5: MSME Innovative & a
Scheme for Promoting Innovation, Rural
Industry & Entrepreneurship (ASPIRE).................................................................................................84
Recommendations for Convergence and Way Forward...........................................................90
6. Annexures.........................................................................................................................91
Annexures-1: MoMSME Schemes..............................................................................................................91
Annexures-2: State Schemes:....................................................................................................................93
Telangana...............................................................................................................................................................93
Maharashtra..........................................................................................................................................................94
West Bengal.........................................................................................................................................................94
Uttar Pradesh......................................................................................................................................................95
Gujarat....................................................................................................................................................................96
Tamil Nadu.............................................................................................................................................................97 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- vii
PREFACE
Micro, Small, and Medium Enterprises (MSMEs) are vital in India’s economic landscape,
contributing significantly to employment generation, industrial output, and exports. These
enterprises are a backbone for innovation and entrepreneurship, fostering inclusive
economic growth. Recognizing their importance, the Ministry of MSME has introduced
multiple schemes to provide financial assistance, skill development, infrastructure support,
marketing aid, and technological upgradation. However, the presence of overlapping
objectives and fragmented implementation across various ministries and departments
might increase inefficiencies, affecting the effectiveness of these schemes. Addressing
these challenges through a structured approach is critical for maximizing their impact and
ensuring optimal utilization of resources.
This report, Achieving Efficiencies in MSME Sector through Convergence of Schemes
highlights the need for streamlining MSME schemes to enhance their efficiency and
accessibility. Convergence is proposed as a strategic approach to optimize policy execution
and resource allocation. It can be categorized into two key types: Information Convergence,
which integrates government-generated data at central and state levels to improve
coordination and decision-making, and Process Convergence, which aligns operational
frameworks by merging similar schemes, consolidating components, streamlining programs
into umbrella schemes, fostering Centre-State collaboration, and ensuring inter-ministerial
coordination.
As part of the consultation process, discussions were held with officials from the Ministry
of Micro, Small & Medium Enterprises (MoMSME) to gain insights into existing policies
and regulatory frameworks. In addition to government consultations, discussions were
also held with key industry stakeholders to incorporate their perspectives on the needs
and challenges faced by MSMEs. Inputs were gathered from senior officials and experts
from the Federation of Telangana Chambers of Commerce and Industry (FTCCI), Indian
Industries Association (IIA), World Trade Centre (WTC), Association of Lady Entrepreneurs
of India (ALEAP), Industry Development Council (IDC), Industry, Commerce & Export
Promotion Department of the Government of Telangana, Maharashtra Small Scale Industries
Development Corporation (MSSIDC), Department of MSME & Export Promotion of the
Government of Uttar Pradesh, Small Industries Development Bank of India (SIDBI), and
other banking institutions. Additionally, the team engaged with the management, CEOs,
and other stakeholders of the MSMEs. Drawing upon extensive research and stakeholder
consultations, this report identifies key challenges in MSME scheme implementation and
explores convergence opportunities to enhance their efficiency and impact. ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- ix
ACKNOWLEDGEMENT
The authors extend their sincere gratitude to NITI Aayog for its leadership, guidance, and
support in the successful completion of this study on the convergence of MSME schemes.
We would like to express our deep appreciation to Shri Suman K. Bery, Vice Chairman,
NITI Aayog; Dr. Arvind Virmani, Member, NITI Aayog; and Shri B.V.R. Subrahmanyam,
CEO, NITI Aayog, whose vision and encouragement have been instrumental in shaping
this report. Their strategic insights and unwavering support were invaluable throughout
the process, helping to refine the approach toward streamlining MSME programs under
cooperative federalism.
Furthermore, we would like to extend our heartfelt gratitude to Shri Ishtiyaque Ahmed,
Program Director, Industry and Foreign Investment Division, for his steadfast support
and incisive feedback. His expertise played a crucial role in ensuring that this report
presents a robust policy framework tailored to the unique challenges of MSME scheme
implementation and convergence. We would also like to acknowledge Ms. Neha Nautiyal,
Deputy Secretary, NITI Aayog; Ms. Aashwita Lal, Director, NITI Aayog; Shri Upendra Kumar
Gupta, Deputy Advisor, Shahid Qayoom, Consultant, NITI Aayog; and Karun Gupta, Young
Professional, NITI Aayog, for their valuable insights and continuous support throughout the
study. Their contributions have significantly enriched the depth and practical relevance of
this report. This study is a reflection of the collective efforts of all stakeholders dedicated
to strengthening the MSME ecosystem in India. MESSAGE
VICE CHAIRMAN,
NITI AAYOG MESSAGE
MEMBER,
NITI AAYOG MESSAGE
CHIEF EXECUTIVE OFFICER,
NITI AAYOG
Message
Micro, Small and Medium Enterprises (MSMEs) contribute around 29% to the nation's
GDP, generate employment for over 28.7 crore individuals, and support nearly 46% of our
exports. Their importance extends beyond mere numbers, as they drive inclusive growth,
foster innovation, and provide livelihood, particularly in rural areas, where entrepreneurial
spirit continues to thrive despite infrastructural challenges. This report examines the
convergence of MSME programmes under cooperative federalism, a topic that carries
significant relevance, given` the critical role of the MSME sector in our economy:
The convergence of various government schemes in India is essential to maximize their
impact, avoid duplication of efforts, and ensure efficient resource utilization. By integrating
multiple initiatives, service delivery can be enhanced and administrative processes can be
streamlined. This approach fosters inclusive growth, reduces gaps in implementation, 'and
promotes sustainable development across sectors.
The findings of this study highlight that while the MSME sector has maintained a
steady growth rate and made considerable contributions to GDP and exports, there is scope
to improve service delivery, scheme coordination, and effective outreach. To ensure that the
benefits of government schemes reach all segments of the MSME community, enhanced
coordination among central, state, and local government agencies is vital. This can address
challenges such as fragmented support systems, limited outreach of schemes, and| low
awareness levels and thereby, improve the overall efficacy of government interventions.
I extend my heartfelt gratitude to Hon'ble Vice Chairman NITI Aayog, Shri Suman
Bery, Hon'ble Member NITI Aayog, Dr Arvind Virmani and CEO NITI Aayog, Shri BVR
(Subrahmanyam for their continuous guidance provided during the course of this study. I
also compliment Administrative Staff College of India and their dedicated team for
undertaking this important work.
?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xix
LIST OF ABBREVIATIONS
AIDCAssam Industrial Development Corporation
AIFsAlternative Investment Funds
APIIC Andhra Pradesh Industrial Infrastructure Corporation
ASPIRE A Scheme for Promotion of Innovation, Rural Industry &
Entrepreneurship
ATIAssistance to Training Institutions
BIBusiness Incubators
BRSBusiness Registration Service
CAFCommon Artisan Fund
CAGRCompound Annual Growth Rate
CBFTE Capacity Building of First Time MSE Exporters
CFCsCommon Facility Centres
CFPCluster Facilitation Project
CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises
CGWBCentral Ground Water Board
CLCSS Credit Linked Capital Subsidy Scheme
CSRCorporate Social Responsibility
CVYCoir Vikas Yojana
CWCCentral Water Commission
DAY - NRLM Deendayal Antyodaya Yojana – National Rural Livelihood Mission
DBTDirect Benefit Transfers
DC-MSME Development Commissioner
DDU-GKY Deen Dayal Upadhyaya Grameen Kaushalya Yojana
DFSDepartment of Financial Services
DFSDepartment of Financial Services
DGFTDirectorate General of Foreign Trade
DICDistrict Industries Center
DoNER Development of the North Eastern Region
DPIIT Department for Promotion of Industry and Internal Trade ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xx
List of Abbreviations
DRDODefence Research Development Organization
DSRDiagnostic Study Report
DSTDepartment of Science and Technology
EA Einheitlicher Ansprechpartner
EAPEntrepreneurship Awareness Programme
EPCGExport Promotion Capital Goods
ESDPEntrepreneurship and Skill Development Programme
FGDsFocus Group Discussions
FoFFund of Funds
GDPGross Domestic Product
GeMGovernment e-Marketplace
GoIGovernment of India
HIsHost Institutes
ICInternational Cooperation
IMDIndia Meteorological Department
IMEsInformal Micro Enterprises
IndEA India Enterprise Architecture
IPRIntellectual Property Rights
KGVYKhadi Gramodyog Vikas Yojana
KPIsKey performance indicators
KVICKhadi and Village Industries Commission
KVKsKrishi Vigyan Kendra
LBIsLivelihood Business Incubators
LLMLarge Language Model
M&EMonitoring and Evaluation
MDAMarket Development Assistance
MDPManagement Development programme
MEISMerchandise Exports from India Scheme
MeitY Ministry of Electronics and IT
MGIRI Mahatma Gandhi Institute for Rural Industrialisation
MGNREGA Mahatma Gandhi National Rural Employment Guarantee Scheme
MHIMinistry of Heavy Industries ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxi
List of Abbreviations
MIsMentor Institutes
MMMargin Money
MoFMinistry of Finance
MoFPI Ministry of Food Processing Industries
MoJSMain ministry- Ministry of Jal Shakti
MoMSME Ministry of Micro, Small, and Medium Enterprises
MoRDMinistry of Rural Development
MPSIDC Madhya Pradesh State Industrial Development Corporation
MSCMulti-Sectoral Collaboration
MSDEMinistry of Skill Development & Entrepreneurship
MSE-CDP Micro & Small Enterprises Cluster Development Programme
MSEsMicro and Small Enterprises
MSMEMicro, Small, and Medium Enterprises
MSMED Micro, Small, and Medium Enterprises Development
NABARD National Bank for Agriculture and Rural Development
NBFCs Non-Banking Financial Companies
NCSNational Career Service
NEIDS North-East, combines the North East Industrial Development
Scheme
NIDHI-iTBI NIDHI-inclusive Technology Business Incubator
NIMSME National Institute for Micro, Small and Medium Enterprises
NRSCNational Remote Sensing Centre
NSICNational Small Industries Corporation
NSQFNational Skills Qualifications Framework
NVCFL NSIC Venture Capital Fund Limited
ODOPOne District, One Product
PMAGY Combines Pradhan Mantri Adarsh Gram Yojana
PM-AJAY Pradhan Mantri Anusuchit Jaati Abhyuday Yojana
PMEGP Prime Minister’s Employment Generation Programme
PMKVY Pradhan Mantri Kaushal Vikas Yojana
PMRYPrime Minister’s Rojgar Yojana
PMSProcurement and Marketing Support
PPPPublic-Private Partnership ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxii
List of Abbreviations
PRIsPanchayati Raj Institutions
PSIEC Punjab Small Industries & Export Corporation
PSUspublic sector undertakings
RAMPRaising & Accelerating MSME Performance
RBIReserve Bank of India
REGPRural Employment Generation Programme
RSETIs Rural Self Employment Training Institutes
S&TScience and Technology
SAMPADA Scheme for Agro-Marine Processing and Development of Agro-
processing Clusters
SFCStanding Finance Committee
SFCsState Financial Corporations
SFURTI Scheme of Fund for Regeneration of Traditional Industries
SHGsSelf-Help Groups
SIDBI Small Industries Development Bank of India
SIPStrategic Investment Plan
SPVSpecial Purpose Vehicle
SRISelf-Reliant India
TBITechnology Business Incubator
TCsTechnology Centres
TUSTechnology Upgradation Scheme
UAPUdyam Assist Platform
ULBUrban Local Body
UtsUnion Territories
ZEDZero Defect Zero Effect ?c"i0in! E ficincis in MSME Scto, t",o/!" Con0,!nc o Sc"'s xxiii
LIST OF TABLES
Table 1.1 MSME Classification...........................................................................................................................2
Table 2.1 Other Initiatives for MSME...............................................................................................................11
Table 3.1 Past Information Convergence Initiatives in India.................................................................17
Table 3.2 Merger of Similar Schemes in the past.....................................................................................23
Table 3.3 Merger of Similar Components in the past.............................................................................23
Table 3.4 Umbrella Schemes............................................................................................................................24
Table 3.5 Collaborative Centre-State Convergence................................................................................25
Table 3.6 Inter-departmental Convergence...............................................................................................26
Table 4.1 Details of Six workshops...............................................................................................................34
Table 4.2 Details of FGDs with MoMSME and Bankers.......................................................................... 35
Table 4.3 PMEGP Snapshot..............................................................................................................................37
Table 4.4 CGTMSE Snapshot............................................................................................................................38
Table 4.5 SRI Fund Snapshot...........................................................................................................................38
Table 4.6 PMS Snapshot....................................................................................................................................39
Table 4.7 International Cooperation Snapshot.........................................................................................39
Table 4.8 Similarities and Uniqueness of Procurement and Marketing Scheme
& International Cooperation Scheme.......................................................................................40
Table 4.9 ASPIRE Snapshot.............................................................................................................................40
Table 4.10 MSME Champions Snapshot..........................................................................................................41
Table 4.11 Similarity between ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)...........................................................................42
Table 4.12 SFURTI Snapshot.............................................................................................................................42
Table 4.13 MSE-CDP Snapshot.........................................................................................................................43
Table 4.14 Similarity between MSE-CDP and SFURTI.............................................................................43
Table 4.15 Skill Development Snapshot........................................................................................................44
Table 4.16 ATI Snapshot......................................................................................................................................44
Table 4.17 Technology Centres Snapshot....................................................................................................45
Table 4.18 Promotion of MSME in NER Snapshot.....................................................................................45
Table 4.19 National SC-ST Hub Snapshot....................................................................................................46
Table 4.20 RAMP Snapshot.................................................................................................................................47
Table 4.21 Coir Vikas Yojana Snapshot..........................................................................................................47
Table 4.22 Khadi Gramodyog Vikas Yojana Snapshot.............................................................................48
Table 4.23 PM Vishwakarma Snapshot..........................................................................................................48
Table 5.1 Comparison between proposed portal and existing portals of MSMEs.......................61
Table 5.2 Comparison between proposed portal and best practices..............................................62
Table 5.3 Comparison between MSE-CDP and SFRUTI....................................................................... 64
Table 5.4 Skill required for MSMEs................................................................................................................69
Table 5.5 Comparison between Procurement and Marketing Support (PMS) and
International Cooperation (IC) Scheme...................................................................................77
Table 5.6 Comparison between MSME Innovative and ASPIRE.........................................................83 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxiv
LIST OF FIGURES
Figure 1.1: Contribution to GDP..........................................................................................................................3
Figure 1.2: Contribution to Export......................................................................................................................3
Figure 1.3: Regional Presence of MSME Units................................................................................................4
Figure 1.4: Share of Manufacturing and Services Enterprises.................................................................5
Figure 1.5: Government Spending on MSME..................................................................................................5
Figure 1.6: MSME Organizational Setup...........................................................................................................6
Figure 3.1: Canada’s BizPal Interface..............................................................................................................20
Figure 3.2: Singapore’s GoBusiness Licensing Portal Interface..............................................................21
Figure 3.3: Maharashtra State Enterprises-Cluster Development Programme................................28
Figure 4.1: PMEGP Target Vs Achieved (Disbursement).......................................................................... 37
Figure 4.2: Barriers in scheme mobilization...................................................................................................51
Figure 4.3: MSE-CDP and SFURTI.....................................................................................................................53
Figure 4.4: Opinion on ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)...........................................................................54
Figure 4.5: Skill support required by MSMEs................................................................................................56 ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxv
EXECUTIVE SUMMARY
Micro, Small, and Medium Enterprises (MSMEs) play a vital role in India’s economy by
contributing significantly to employment generation, industrial output, and exports.
They form the backbone of innovation and entrepreneurship, serving as key drivers of
inclusive and sustainable economic growth. To support this sector, the Ministry of MSME
currently implements 18 schemes aimed at providing financial assistance, skill development,
infrastructure support, marketing aid, and technological upgradation. However, the presence
of overlapping objectives and fragmented implementation across multiple ministries and
departments has at times resulted in inefficiencies, duplication of efforts, and limited
beneficiary outreach. In light of these challenges, convergence approaches are proposed
to streamline policy implementation, enhance inter-ministerial coordination, and ensure
more effective and efficient allocation of resources.
India has experimented with multiple models of convergence, which can broadly be
categorized into two types. Information Convergence involves integrating government-
generated data at both the central and state levels to strengthen coordination and improve
decision-making. Process Convergence focuses on aligning operational frameworks through
strategies such as merging similar schemes or components, consolidating programs under
umbrella schemes, fostering Centre–State collaboration, and establishing inter-ministerial
coordination mechanisms.
This study aims to achieve the following objectives:
1. To evaluate the various Government of India (GoI)schemes and programmes of the
MSME sector.
2. To examine the present level of convergence of MSME programmes.
3. To identify the best practices of convergence in center, states and internationally.
4. To make recommendations on the convergence opportunities and corrective steps.
These objectives aim to provide a comprehensive understanding of how convergence
can be leveraged to build a more coherent, responsive, and impactful policy ecosystem
for the MSME sector.
Methodology:
The study adopts a mixed-methods approach combining secondary research and extensive
stakeholder consultations to identify convergence opportunities of MoMSME schemes. The
methodology consists of the following key steps:
1. Review of MoMSME Schemes
All existing schemes were reviewed based on eligibility, target beneficiaries, areas of
support, intervention types, and implementing agencies. This helped map the scheme
landscape and identify overlaps. ?chieving fqciencie- in S Sector through Convergence of Scheme- xxvi
Executive Summary
2. Identification of Uniqueness, Similarities, and Duplication
The analysis focused on detecting thematic overlap and duplication across schemes
to understand gaps, inefficiencies, and areas where convergence may be beneficial.
3. Stakeholder Consultation Workshops and Focus Group Discussions (FGDs)
To validate findings and gather practical insights, workshops were conducted across
six locations—Mumbai, Lucknow, Chennai, Tiruppur, Guntur, and Hyderabad. The
workshops and FGDs with key stakeholders helped capture operational challenges
and expectations related to scheme convergence. The participants included officials
from the Ministry of MSME, state departments, banks, industry associations, and MSME
representatives.
4. Development of the Convergence Framework
Insights from the review and consultations were synthesised to design a proposed
convergence model, outlining justification, implementation pathways, and potential
challenges.
Recommendations:
The following recommendations are proposed to facilitate convergence across centrally
administered schemes to enhance policy coherence, operational efficiency, and targeted
delivery of support to MSMEs:
1. Centralized Portal For Micro, Small And Medium Enterprises
(MSMEs)
To enhance information convergence and streamline access to MSME support, a centralized
digital portal integrating schemes, compliance requirements, financial assistance, and
market insights is recommended. This AI-powered platform will provide real-time
guidance, personalized scheme recommendations, and seamless tracking of applications
through an interactive dashboard. The portal should include key modules such as scheme
information, compliance tracking, financial assistance, and market research, with AI-driven
chatbots and mobile app integration for accessibility. By collaborating with technology
research institutions and digital governance bodies, the proposed initiative will simplify
MSME operations, improve compliance efficiency, and provide critical market intelligence,
ensuring a more effective and transparent support system.
2. Convergence of Scheme of Fund for Regeneration of
Traditional Industries (SFURTI) with the Micro and Small
Enterprises - Cluster Development Programme (MSE-CDP)
To streamline cluster development efforts and optimize resources, it is recommended
to integrate SFURTI with MSE-CDP. While both schemes focus on cluster-based
development, MSE-CDP aims at enhancing infrastructure and competitiveness, whereas
SFURTI supports traditional industries, particularly in uncovered and aspirational districts.
The proposed convergence framework includes the creation of a special category for
traditional industries within MSE-CDP, maintaining SFURTI’s objectives while benefiting ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxvii
Executive Summary
from a unified governance structure. Local institutions such as NGOs and Panchayati Raj
Institutions (PRIs) may continue to play a role in traditional industry clusters, ensuring
regional expertise and stakeholder involvement.
3. Convergence of Skill Development Programmes
Multiple government schemes focus on entrepreneurship, technical skills, and rural
craftsmanship, often with overlapping objectives. A coordinated skill development framework
will ensure a more structured and responsive training approach for MSMEs. The proposed
convergence strategy should follow a three-tiered approach. (i) Entrepreneurship and
Business Skills Development – Merge skill components of PMEGP, IC, and PMS under ESDP
to offer training in entrepreneurship, financial literacy, market access, export readiness,
and credit facilitation. (ii) Technical Skill Development – Enhance coordination among
Tool Rooms, Technology Centres, MSME Lean Scheme, and digital initiatives, ensuring
specialized technical training aligned with industry requirements. (iii) Training for Rural and
Women Artisans – Continue skill-building initiatives under Coir Vikas Yojana, National SC-
ST Hub, and Khadi & Village Industries programmes, preserving their focus on traditional
crafts, rural entrepreneurship, and marginalized communities.
4. Convergence of Procurement and Marketing Scheme (PMS)
and International Cooperation (IC) Schemes
To simplify access to marketing support for MSMEs and enhance their domestic and
international market reach, it is recommended to converge PMS and IC under a unified
Marketing Assistance Wing with two key components: Domestic Marketing Assistance
and International Marketing Assistance. The Domestic Marketing Assistance wing may
focus on capacity building through ESDP, organizing and participating in domestic trade
fairs/exhibitions, and domestic procurement. The International Marketing Assistance wing
may focus on capacity building through ESDP for first-time exporters, organizing and
participating in international trade fairs/exhibitions, and Framework for International Market
Intelligence Dissemination.
5. Convergence of A Scheme for Promoting Innovation, Rural
Industries & Entrepreneurship (ASPIRE) with MSME Innovative
To streamline innovation support for MSMEs, it is recommended to merge ASPIRE
with MSME Innovative under a special category for agro-rural enterprises. Under the
convergence framework, it is suggested that ASPIRE be integrated as a dedicated agro-
rural enterprise category within MSME Innovative. A portion of MSME Innovative’s budget
may be earmarked for agro-rural incubators, ensuring continuity of financial support. A
structured implementation framework will guide the transition, including strategic planning,
stakeholder engagement, funding allocation, and performance monitoring.
Conclusion:
For schemes with similar objectives, convergence should be prioritized through a well-
coordinated governance structure that enables smoother implementation and greater ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- xxviii
Executive Summary
efficiency. Such convergence can be strengthened by fostering collaboration among
ministries and implementing agencies through workshops, joint trainings, and targeted
outreach, which would enhance scheme impact and improve beneficiary mobilization.
Capacity-building of administrators should also be emphasized to ensure better targeting
and delivery of support.
At the same time, convergence efforts must be approached with caution for schemes
designed for specific beneficiary groups, such as the National SC/ST Hub or the NER
MSME Promotion Programme, to prevent dilution of their intended impact. Similarly, large
flagship programmes like PMEGP and PM Vishwakarma should remain independent due
to their substantial scale, distinct objectives, and focused economic benefits. 01
MSMES AS
GROWTH
ENGINES OF
THE ECONOMY Achieving Efqciencies in MSME Sector through Convergence of Schemes 2
1.1 ROLE OF MICRO, SMALL, AND MEDIUM ENTERPRISES
(MSMES) IN THE ECONOMIC DEVELOPMENT
The Micro, Small, and Medium Enterprises (MSME) sector is the foundation stone of
India’s economic framework, encompassing a diverse range of businesses with varying
levels of scale, technology, and innovation. These enterprises play a critical role in driving
economic development by contributing significantly to Gross Domestic Product (GDP),
Export, generating employment, and supporting regional and sectoral growth. The sector
is characterized by diverse range of businesses that vary in size, technological capability,
and employment generation. With the capacity to produce 6,000 distinct products,
MSMEs play a pivotal role in catering to the demand for mass consumption goods.
Given its strategic importance, the MSME sector has the potential to serve as an engine
of economic growth, provided it is supported by a conducive policy environment and
targeted developmental initiatives.
CLASSIFICATION:
In accordance with the provision of Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 of Government of India, a classification came into effect on 1st July,
2020, based on investment in plant and machinery and turnover. A revised classification
has come into effect from April 1, 2025, as per the Ministry of MSME’s Notification S.O.
No. 1364(E) dated March 21, 2025.
Table 1.1. MSME Classification
Enterprise
Earlier ClassificationRevised Classification
Investment
in plant and
machinery
Turnover
Investment
in plant and
machinery
Turnover
Micro
Not exceeding
Rs. 1 crore.
Not exceeding Rs.
5 crores.
Not exceeding
Rs. 2.5 crore.
Not exceeding
Rs. 10 crores.
Small
Not exceeding
Rs. 10 crores.
Not exceeding Rs.
50 crores.
Not exceeding
Rs. 25 crores.
Not exceeding
Rs. 100 crores.
Medium
Not exceeding
Rs 50 crores.
Not exceeding Rs.
250 crores.
Not exceeding
Rs 125 crores.
Not exceeding
Rs. 500 crores.
ECONOMIC CONTRIBUTION:
The growth of MSME sector is at par with the Industrial Sector for the last two decades. Between 2000 and 2016, the industrial sector grew at an average of around 7.6%, while the MSME sector averaged 8.6% growth
1
. Between 2017 and 2023, the sector contributed
between 27% and 30% to the GDP of the country
2
.
1 Report of the Expert Committee on Micro, Small and Medium Enterprises (2019)
2 CONTRIBUTION OF MSMEs TO THE GDP https://www.pib.gov.in/PressReleasePage.aspx?PRID=2035073 Achieving Efqciencies in MSME Sector through Convergence of Schemes 3
29.7
30.5 30.5
27.3
29.6
30.1
25
26
27
28
29
30
31
2017-182018-192019-202020-212021-222022-23
Share of MSME GVA in All India GDP (in %)
Share of MSME GVA in All India GDP (in %)
Figure 1.1: Contribution to GDP
Accounting to this growth, the sector employs 62%
3
of the country’s workforce that is
approximately 28.13 crores
4
which in terms of volume stands next to the agriculture sector
only. MSMEs’ share in the country’s export is about 45%
5
although approximately only
1.1% of MSMEs registered on the Udyam Portal are engaged in export activities
6
. Their
export contribution peaked at 49.77% just before the COVID-19 pandemic.
REGIONAL PRESENCE:
49.75%
49.35%
45.03%
43.59%
45.73% 45.79%
40%
41%
42%
43%
44%
45%
46%
47%
48%
49%
50%
51%
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25*
% share of Export of MSME related products in All India Export
Figure 1.2: Contribution to Exports (*up to May 2024)
3 A microscope on small businesses: The productivity opportunity by country. McKinsey Global Institute
(MGI). (2024).
4 As per Udyam Registration Portal
5 CONTRIBUTION OF MSMEs TO THE GDP https://www.pib.gov.in/PressReleasePage.aspx?PRID=2035073
6 EXIM Report (2023) Achieving Efqciencies in MSME Sector through Convergence of Schemes 4
Rural
51%
Urban
49%
Regional PresenceOf MSMEs
Figure 1.3: Regional Presence of MSMEs
The distribution of MSMEs is marginally skewed in favour of rural areas, which account
for 51% of the total, compared to 49% in urban areas
7
. This reflects the entrepreneurial
spirit that thrives across India despite infrastructural challenges. However, the majority of
rural MSME units remain informal and unregistered, with limited access to digital tools and
platforms
8
. This has neccesitated the fomalization of MSMEs across the country.
FORMALIZATION:
Pushing forward the objective of MSME formalisation, Government of India (GoI) launched
the Udyam Registration Portal in 2020 to simplify the registration process. This initiative
is expected to induce MSMEs to come into the fold of formalisation and avail the benefits
of the various schemes and facilities extended to the sector. Retail and Wholesale trades
have also been included as MSMEs for this purpose
9
. To rationalize the informal sector,
the Ministry, in collaboration with the Small Industries Development Bank of India (SIDBI),
introduced the Udyam Assist Platform (UAP) in January 2023, to integrate Informal Micro
Enterprises (IMEs) into the formal sector. The Udyam Registration Portal enables existing
enterprises to self-register online, free of cost and paperless, to obtain a Udyam Registration
Certificate, whereas the Udyam Assist Platform helps informal micro enterprises without
the required documents register through designated agencies and receive an equivalent
certificate.
MARKET SIZE:
Till 2016, there were 6.34 crore
10
unincorporated nonagricultural MSMEs in the country
engaged in different economic activities
11
. About 3.94 crore MSMEs are registered on the
7 MSME Annual Report (2023-24)
8 Source: MSME DEPARTMENT, GOVERNMENT OF TN, 2021
(www.msmeonline.tn.gov.in/images/MSME_Committee_Draft_Report.pdf)
9 SIDBI Annual Report 2021-22 (https://development.sidbi.in/AnnualReport202122/msme-outlook.php)
10 As per the latest National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation
11 Non-agricultural enterprises which are not incorporated (i.e. not registered under Companies Act, 1956) include proprietary and partnership enterprises (excluding limited liability partnerships), Self Help Groups (SHGs), Non-Profit Institutions (NPIs) and Trusts. Achieving Efqciencies in MSME Sector through Convergence of Schemes 5
Udyam Registration Portal. Another 2.71 crore informal micro enterprises are registered
on the Udyam Assist Platform. This number is expected to grow from 6.34 crore to
approximately 7.5 crore, growing at a projected Compound Annual Growth Rate (CAGR) of
2.5%. As on October 2024, out of the registered MSMEs, 25% are engaged in manufacturing,
while 75% are involved in service activities
12
.
Manufacturing,
99,19,469
Service,
2,95,44,064
0%20% 40% 60% 80% 100%
Activity wise registration of MSMEs
Figure 1.4: Share of Manufacturing and Services Enterprises
GOVERNMENT SPENDING ON MSME SECTOR:
Several measures are being undertaken for the holistic development of the sector. Among other steps, the government spending on the sector has risen to 22,094 crores in 2023-
24 from 6,717 crores in 2019-20.
13
6,717.53
22,094.25
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
2019-20 2020-21 2021-222 022-23 2023-24
Budget Outlay -Actuals
(Rs. in Crores)
Financial Year
Last Five Years MSME Budget
Figure 1.5: Government Spending on MSME
12 Source: Udyam Registration Portal (https://udyamregistration.gov.in/RealTimeUdyamDashboard.aspx)
13 MSME Budget 2024 Achieving Efqciencies in MSME Sector through Convergence of Schemes 6
1.2 MICRO, SMALL, AND MEDIUM ENTERPRISES
(MSMES) AND ITS ATTACHED ORGANIZATIONS
MSME ORGANIZATION STRUCTURE
Figure 1.6: MSME Organizational Setup
Source: msme.gov.in/about-us/organization-setup
The Ministry of Micro, Small & Medium Enterprises (MSME) has several key organizations
attached to it, each with specific mandates to support the sector. Role of some of the
key bodies and departments include:
Officeofthe
Development
Commissioner (DC-
MSME)
eImplementingpoliciesandvariousprogramsforMSMEs
eAdvisingthegovernment onpolicyformulation,
eOffering consultancyservices,
eFacilitatingtechnologyupgradationandmodernization
eDevelopinghumanresourcesthrought rainingprograms
KhadiandVillage
Industries
Commission
(KVIC)
eRuralemploymentthroughkhadiandvillageindustries
eProducingsaleablearticlesandfosteringself-r eliancein
rural communities
eTraining,research,andprovidingrawmaterialstopeople
engagedinkhadiandvillageindustries ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 7
Officeofthe
Development
Commissioner (DC-
MSME)
fiImplementingpoliciesandvariousprogramsforMSMEs
fiAdvisingthegovernment onpolicyformulation,
fiOffering consultancyservices,
fiFacilitatingtechnologyupgradationandmodernization
fiDevelopinghumanresourcesthrought rainingprograms
KhadiandVillage
Industries
Commission
(KVIC)
fiRuralemploymentthroughkhadiandvillageindustries
fiProducingsaleablearticlesandfosteringself-r eliancein
rural communities
fiTraining,research,andprovidingrawmaterialstopeople
engagedinkhadiandvillageindustries
Coir Board
fiDevelopmentofthe coir industry
fiPromotingexports,research,andimprovingliving
conditionsforworkers
National Small
Industries
Corporation (NSIC)
fiPromotes thegrowthofMSMEs through schemes like
marketingsupport,creditfacilitation,andproviding
rawmaterials
fiOperates technical services centresacross India
NationalInstitute
for Micro, Small
and Medium
Enterprises
(NIMSME)
fiPremiertraininginstituteforMSMEdevelopment
fiOffers capacity-buildingprograms forentrepreneurs and
governmentofficials, forenhancingthecapabilities and
competitiveness of smallenterprises
Mahatma Gandhi
Institute for Rural
Industrialisation
(MGIRI)
fiResponsibleforacceleratingruralindustrialisationfor
sustainable villageeconomy
fiAttractprofessionals andexperts toGramSwaraj
fiEmpowertraditionalartisans,encourageinnovation
throughpilot study/fieldtrials andR&Dforalternative
In addition to the key bodies and offices mentioned above, various other institutions,
banks, and financial entities play a crucial role in the successful planning, implementation,
and monitoring of MSME schemes. For instance, organizations such as the National Bank
for Agriculture and Rural Development (NABARD), Small Industries Development Bank
of India (SIDBI), and State Financial Corporations (SFCs) contribute significantly to MSME
development through financial support, capacity building, and providing advisory services.
These institutions collaborate with the Ministry of MSME and Industry Associations to
ensure the smooth dissemination of information regarding schemes, enhance access to
credit, and monitor the effective implementation of these programs. ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 8
While the institutions have made remarkable contributions individually, a unified
approach that aligns their efforts is essential for holistic growth and sustainable
development of the MSME sector.
This is because MSMEs often face complex challenges due to the fragmented support system provided by multiple government agencies and schemes, which operate in silos
14
. It is argued that the present ecosystem of MSME suffers from
poor delivery of services at the field level
15
. The schemes and programmes have
limited outreach with a large number of very small schemes and that there is a lack of coordination among the various organisations involved in the promotion of MSMEs, including organisations of the State/UT Governments and poor linkages with the institutional stakeholders in the private sector. This necessitates the need for a converged and cohesive approach to maximize the benefits available to the sector. In the next chapter, the necessity to converge the efforts of every department and all the resources, for an effective planning, implementation and monitoring of a scheme is explored.
14 Source: ADB Briefs 2021 - Enhancing Competitiveness and Productivity of India’s Micro, Small, and Medium- Sized Enterprises during Pandemic Recovery
15 MSME Strategic Action Plan (https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan.pdf) 02
THE CASE
FOR
CONVERGENCE Achieving Efqciencies in MSME Sector through Convergence of Schemes 10
2.1 OVERVIEW OF MICRO, SMALL, AND MEDIUM
ENTERPRISES (MSMES) SCHEMES
The Ministry of MSME has launched 18 schemes targeted at providing credit and financial
assistances, skill development training, infrastructure development, marketing assistance,
technological and quality upgradation and innovation support, for MSMEs across the
country.
Credit
Assistance
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•CreditGuaranteeFund
TrustforMicroandSmall
Enterprises(CGTMSE)
•Self-Reliant India(SRI)Fund
•NationalSCSTHub
•PM Vishwakarma
Marketing
Assistance
•Procurementand
MarketingSupport(PMS)
•InternationalCooperation
(IC)
•CoirVikas Yojana(CVY)
•KhadiGramodyogVikas
Yojana(KGVY)
Credit
Assistance
Technology
Upgradation
dit
e
•Champions
•Raising&Accelerating
MSME Performance
(RAMP)
•TechnologyCenters
•CoirVikas Yojana(CVY)
Infrastructure
Development
• Micro & Small
Enterprises Cluster
Development
(MSE-CDP)
• Scheme of Fund for
Regeneration of
Traditional Industries
(SFURTI)
• Promotion of MSME in
NER
• Coir Vikas Yojana (CVY)
• Khadi Gramodyog Vikas
Yojana (KGVY)
Trainingand
Skill
Development
•AssistancetoTraining
Institutions (ATI)
•Entrepreneurshipand
SkillDevelopment
Programme(ESDP)
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•PM Vishwakarma
•CoirVikas Yojana(CVY)
Innovation
andResearch
Support
•ASchemeFor
PromotionOf
Innovation,Rural
Industry&
Entrepreneurship
(ASPIRE)
•Champions
• Prime Minister’s Employment Generation Programme (PMEGP)
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Self-Reliant India (SRI) Fund
• National SC ST Hub
• PM Vishwakarma Achieving Efqciencies in MSME Sector through Convergence of Schemes 11
2.1 OVERVIEW OF MICRO, SMALL, AND MEDIUM
ENTERPRISES (MSMES) SCHEMES
The Ministry of MSME has launched 18 schemes targeted at providing credit and financial
assistances, skill development training, infrastructure development, marketing assistance,
technological and quality upgradation and innovation support, for MSMEs across the
country.
Credit
Assistance
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•CreditGuaranteeFund
TrustforMicroandSmall
Enterprises(CGTMSE)
•Self-Reliant India(SRI)Fund
•NationalSCSTHub
•PM Vishwakarma
Marketing
Assistance
•Procurementand
MarketingSupport(PMS)
•InternationalCooperation
(IC)
•CoirVikas Yojana(CVY)
•KhadiGramodyogVikas
Yojana(KGVY)
Credit
Assistance
Technology
Upgradation
dit
e
•Champions
•Raising&Accelerating
MSME Performance
(RAMP)
•TechnologyCenters
•CoirVikas Yojana(CVY)
Infrastructure
Development
• Micro & Small
Enterprises Cluster
Development
(MSE-CDP)
• Scheme of Fund for
Regeneration of
Traditional Industries
(SFURTI)
• Promotion of MSME in
NER
• Coir Vikas Yojana (CVY)
• Khadi Gramodyog Vikas
Yojana (KGVY)
Trainingand
Skill
Development
•AssistancetoTraining
Institutions (ATI)
•Entrepreneurshipand
SkillDevelopment
Programme(ESDP)
•PrimeMinister’s
EmploymentGeneration
Programme(PMEGP)
•PM Vishwakarma
•CoirVikas Yojana(CVY)
Innovation
andResearch
Support
•ASchemeFor
PromotionOf
Innovation,Rural
Industry&
Entrepreneurship
(ASPIRE)
•Champions
• Prime Minister’s Employment Generation Programme (PMEGP)
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Self-Reliant India (SRI) Fund
• National SC ST Hub
• PM Vishwakarma
The 18 schemes mentioned in the context of MSME development have been grouped
based on the type of support provided to MSMEs. It is important to note that many of
these schemes revolve around more than one focus area, often serving multiple purposes.
For example, the Prime Minister’s Employment Generation Programme (PMEGP) not only
provides financial assistance to set up micro and small enterprises but also incorporates
components of skill development for unemployed youth.
Apart from the schemes under the Ministry of Micro, Small, and Medium Enterprises
(MoMSME), the Government of India has also collaborated with various other ministries,
departments, and statutory bodies to launch key initiatives aimed at supporting and
enhancing the growth of MSMEs. Some of these key initiatives are listed in Table 2.1.
Table 2.1. Other Initiatives for MSME
InitiativeLaunched by
MUDRA Loans (Pradhan Mantri MUDRA Yojana - PMMY)
Government of India (GoI)
Implemented by Ministry of Finance. Partnered by various financial institutions
Direct Benefit Transfers (DBT)
Government of India (GoI)
Involves multiple ministries and departments, including the Ministry of Finance and Ministry of Electronics and Information Technology, to streamline subsidy and benefit transfers directly into the beneficiaries’ bank accounts.
Credit Guarantee Scheme for MSMEs
Ministry of MSME (MoMSME)
In collaboration with Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Public Procurement Policy
Government of India (GoI)
Central and state governments, along with public sector undertakings (PSUs)
Skill India Digital Platform
Ministry of Skill Development & Entrepreneurship (MSDE)
As part of Skill India Initiative. Partnered by Training Institutes, Employers, and Private Sector Stakeholders
Emergency Credit Line Guarantee Scheme (ECLGS)
Ministry of Finance (MoF)
As part of Aatma Nirbhar Bharat Abhiyan
MSME SAMBHAV
Ministry of MSME (MoMSME)
National Level Awareness Program
MSME Samadhaan
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations
MSME Sampark
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations
MSME Sambandh
Ministry of MSME (MoMSME)
Involves State Governments, Industry Associations Achieving Efqciencies in MSME Sector through Convergence of Schemes 12
2.2 THE NEED OF CONVERGENCE FOR SUSTAINABLE
GROWTH
Government initiatives mainly aim to improve quality of life or a particular aspect of it.
In doing so, sometimes, the initiatives tend to overlap in terms of their objectives and
impact they expect to create. These initiatives are spread across various departments or
ministries in the government requiring coordination and collaboration among all of them at
different levels. For instance, in the table mentioned above, there are numerous initiatives
taken by the GoI to support the growth of MSMEs through different collaborative partners.
Previous studies on MSME have highlighted a systemic weakness in the duplication of
same/similar programmes run by various Ministries/Departments for the same target
groups
16
. For instance, the Coir Board is situated in the ambit of the Ministry of MSME,
however, other Departments also invest in programmes for promotion of coir industry.
Similar issues are found for village industry sector where major investments, which are
not fully coordinated, are taking place from the Handicrafts Institutions as well as Rural
Development set up. Similar issues are being faced in various micro and small enterprise-
based sectors such as leather, handicrafts, etc.
PM’s task force on MSMEs suggested that there needs to be a convergence of schemes as far as possible on a single platform which will facilitate an easier and convenient delivery of benefits to the target group without any leakage
17
. Current
studies also highlight the urgent need for convergence and that policy structures need to be firmed up to facilitate effective implementation of these programmes to ensure that allocation results in outputs and outputs in outcomes
18
. A coordinated
effort can significantly reduce the risk of duplication and the confusion it causes in the beneficiary group
19
.
Ideally, the approach should be for agencies to work across portfolio boundaries, formally and informally, to achieve a shared goal and an integrated government response to particular issues to improve effectiveness and efficiency. This approach is also recognized by Sustainable Development Goal SDG 17 - Partnerships for the goals - multi-sectoral collaboration. Multi-Sectoral Collaboration (MSC) means multiple stakeholders and sectors intentionally coming together and collaborating in a managed process to achieve shared outcomes and common goals
20
. Convergence of all programmes in terms of funding,
support, inspection, and supervision mechanism will lead to maximize the benefits
accrued to the beneficiaries
21
.
16 Source: MSME Strategic Action Plan https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan. pdf
17 Report of Prime Minister’s Task Force on Micro, Small and Medium Enterprises, 2010
18 Press Information Bureau, Government of India, Ministry of Finance https://www.pib.gov.in/newsite/ PrintRelease.aspx?relid=70159
19 Source: MSME Strategic Action Plan https://msme.gov.in/sites/default/files/MSME-Strategic-Action-Plan. pdf
20 https://sdgs.un.org/goals/goal17
21 MSME & Skills Convergence, Govt. of West Bengal Achieving Efqciencies in MSME Sector through Convergence of Schemes 13
The intended objectives of such convergence should be:
Single
Window
Mobilizationofbeneficiariesforallschemeson
asingleplatformthroughoutreachprogrammes
Centralized
Database
Real-timedatacaptureona singlecentralized
databaseb y seamlesslyintegratingthe
individualdatabases
Funds
Effectiveplanningforoptimumutilizationof
Central/StateGovernmentfunds
Infrastructure Optimumusageofavailableinfrastructure
Awareness
Widespreadcommunity connects,outreach
programmesatthegrass rootlevel
Monitoring
Effectivemonitoringandinspectionmechanismat
thegrassr ootlevelinvolvingresourcepoolfrom
individuali nstitutions
The next chapter draws on past research studies and best practices to outline
various approaches through which convergence can be implemented in the MSME
sector. 03
CONVERGENCE
MODELS AND
BEST PRACTICES Achieving Efqciencies in MSME Sector through Convergence of Schemes 16
3.1. FRAMEWORK FOR EFFECTIVE CONVERGENCE:
India’s journey toward enhanced governance has involved multiple models of convergence,
aiming to integrate information and processes across various levels of government. In the
context of policy implementation, convergence involves aligning and coordinating multiple
schemes to ensure they complement each other, reduce redundancies, and enhance overall
effectiveness Convergence can be broadly classified into two key types:
1. Information Convergence and
2. Process Convergence.
This chapter will delve into these convergence models to understand their implementation
and impact on governance through some best practices at national and international level.
3.1.1 Information Convergence
While breaking physical silos between ministries and departments can be challenging,
breaking virtual silos is a more achievable goal. Information convergence focuses on
integrating government-generated data at both the central and state levels. By effectively
sharing this data, there is possibility to enhance coordination, facilitate informed decision-
making, and ultimately improve governance outcomes. The availability and accessibility
of shared information serve as foundation of efficient, transparent, and accountable
governance.
3.1.2 Process Convergence
Process Convergence refers to the unification and alignment of various government
schemes, processes, and activities to reduce duplication, streamline operations, and deliver
services more effectively. It aims to create synergy by merging similar schemes, combining
common components, and promoting collaboration between different levels of government
and across ministries. This approach ensures that resources are used efficiently, overlaps
are minimized, and citizens receive services in a more coordinated and integrated manner.
Process Convergence can be carried out in one of the five ways mentioned below:
MergeSimilar
Schemes
MergeSimilar
components
Streamliningto
Createan Umbrella
Scheme
Collaborative
Centre-State
schemes
Interministerial
convergence
010203
0405 Achieving Efqciencies in MSME Sector through Convergence of Schemes 17
It is important to differentiate between convergence and merger in the context of
policy implementation. Convergence refers to the alignment and coordination of multiple
schemes to ensure they complement each other, reduce redundancies, and enhance
overall effectiveness. Under convergence, schemes maintain their individual structures but
work collaboratively by sharing resources, expertise, and implementation frameworks. This
allows for greater integration while preserving the unique objectives of each scheme.
Merger, while distinct, can be considered one form of convergence—one that involves fully
combining two or more schemes into a single entity by consolidating their objectives,
components, budgets, and administrative mechanisms. This results in a unified scheme
that replaces the original ones, thereby streamlining operations. However, a merger
represents only one end of the convergence spectrum and may not fully capture the
broader, more flexible approaches that convergence can encompass. Process convergence
can be operationalized in various ways, depending on the nature of the schemes and
administrative priorities.
3.2. BEST PRACTICES
3.2.1 Best Practices for Information Convergence
Some notable examples of information convergence initiatives from India include:
Table 3.1: Past Information Convergence Initiatives in India
Information
Convergence
Initiative
Description Key StakeholdersImpact
IndiaWRIS
22
A web-based database
providing real-time
information on surface
and groundwater
resources, and water
quality.
Main ministry-
Ministry of Jal Shakti
(MoJS);
Other agencies-
Central Water
Commission (CWC),
Central Ground Water
Board (CGWB),
India Meteorological
Department (IMD),
National Remote
Sensing Centre
(NRSC),
State govt- Andhra
Pradesh, Uttar
Pradesh and Gujarat
etc.
Informed decision-
making in water
resource management
22 https://pib.gov.in/PressReleasePage.aspx?PRID=1643776 Achieving Efqciencies in MSME Sector through Convergence of Schemes 18
Information
Convergence
Initiative
Description Key StakeholdersImpact
PM Gati Shakti
23
A digital platform for
coordinated planning
and implementation of
infrastructure projects.
16 Ministries (Central
Government)
Improved coordination
in infrastructure
development
DISHA
Dashboard
24
Enables monitoring of
project progress and
KPIs for 42 flagship
schemes across 20+
ministries.
20+ Ministries
(Central Government)
Enhanced accountability
and timely
intervention in scheme
implementation
India Enterprise
Architecture
(IndEA)
25
Provides a generic
framework comprising
of a set of architecture
reference models, which
can be converted into
a Whole-of-Government
Architecture
Ministry of Electronics
and IT (MeitY)
Used by Central
Ministries, State
Governments,
Government Agencies
and Public Sector
Enterprises who
wish to re-architect
their enterprises for
integrated delivery of
digital services
National Career
Service (NCS)
26
Digital platform
providing employment-
related services,
integrated with 28
State/UT portals
Ministry of Labour
and Employment, 28
States/UTs
Unified job search
and career counselling
services across multiple
states
CASE STUDY: NATIONAL BEST PRACTICES
1. Telangana’s TG-iPASS
Background: Before 2014, industrial approvals in Telangana (as in most Indian states)
were plagued by bureaucratic delays, procedural delays, and lack of coordination among
departments. Entrepreneurs had to visit multiple government offices, submit the same
information repeatedly, and wait for months to receive clearances. This inefficiency was a
major bottleneck in attracting investments and promoting industrial growth in the newly
formed state.
Solution: To address these challenges, the Government of Telangana enacted the TG-
iPASS (Telangana Industrial Project Approval and Self-Certification System) Act, 2014,
establishing a single-window, time-bound, and transparent clearance system for industrial
projects.
23 https://pib.gov.in/PressReleasePage.aspx?PRID=2003463
24 https://pib.gov.in/PressNoteDetails.aspx?NoteId=150545&ModuleId=3®=3&lang=1
25 https://egovstandards.gov.in/sites/default/files/2021-10/IndEA%20Framework%20V%201.0.pdf
26 https://www.pib.gov.in/PressReleasePage.aspx?PRID=1989161 Achieving Efqciencies in MSME Sector through Convergence of Schemes 19
Key features of the system include:
1 day to 30 days of approval time frame depending upon on the complexity of
the approval.
Making mandatory for the Competent Authorities to seek shortfall/additional
information required, only once, within three days from receipt of the application.
Empowering Entrepreneurs with Right to clearances to know the reasons for delay
in getting the clearance within time limits.
Penalties for officers who delay clearances beyond stipulated time.
Enabling Infrastructure: TG-iPASS integrates over 25 departments onto one digital platform
where investors can apply for all approvals simultaneously. The system supports real-time
data exchange among departments (Pollution Control, Urban Development, Fire, Power,
etc.) reducing paperwork and delays. Investors can track application status online, ensuring
transparency. Built-in escalation and resolution systems enhance investor confidence.
Impact: As of FY 2022-23, TG-iPass has approved `26,791 crore worth of investments in
3,191 new industrial projects. Cumulatively TG-iPASS has attracted 22,745 industries so far,
investments of Rs. 2,60,060 Crs. and created employment for 17.54 lakhs people
27
.
CASE STUDY: INTERNATIONAL BEST PRACTICES
1. Estonia’s “Once Only” Principle
Background: Estonia, a small Baltic nation with a population of 1.3 million, is globally recognized for its digital governance leadership. In 1990s, Estonia adopted a “digital- first” approach to build efficient, citizen-centric public services. A cornerstone of this transformation is the “Once Only” Principle.
Before the implementation of digital governance, citizens had to:
Submit the same personal information (e.g., name, address, income) to multiple
government departments repeatedly.
Deal with long queues, paperwork, and delays in services such as healthcare, tax,
business registration, and education.
Face a lack of coordination between government agencies, leading to inefficiencies
and duplication of efforts.
Solution: In the early 2000s, Estonia incorporated the “Once Only” Principle into its legal
framework, which mandates that the state cannot ask citizens for the same information
more than once
28
. Instead, government departments must retrieve the required data from
existing databases, with appropriate consent and secure access.
27 Invest Telangana Annual Report (2022-23) https://invest.telangana.gov.in/wp-content/uploads/2023/06/ Final-Annual-Report-2003_A4_compressed.pdf%20Annual%20Report%202022-23
28 https://economy-finance.ec.europa.eu/document/download/2ec579de-624a-4f48-961d-3c3994fc75c1_
en?filename=digital_identity_once-only-principle_and_reducing_administrative_burden.pdf&prefLang=ga
Other International Best Practices:
Germany’s Einheitlicher Ansprechpartner (EA): It is a digital one-stop shop
designed to simplify administrative procedures for businesses, particularly in line with the EU Services Directive. The platform integrates services from state and local authorities, enabling users to submit applications, upload documents, and track the real-time status of permits and licenses.
Australia’s Business Registration Service (BRS): An online platform that
simplifies the process of starting a business by integrating the registration
of key business identifiers such as the Australian Business Number (ABN),
Goods and Services Tax (GST), and business names. The platform provides a
step-by-step guided experience through a user-friendly interface, significantly
reducing complexity for new entrepreneurs. It also offers real-time status
updates, enhancing transparency and user confidence, while its mobile-friendly
design ensures accessibility for users on the go. Achieving Efqciencies in MSME Sector through Convergence of Schemes 20
Enabling Infrastructure: X-Road is Estonia’s secure data exchange layer that connects
over 1,000 public and private sector organizations. It allows decentralized databases (tax,
health, police, education, etc.) to communicate securely and in real time. Citizens can
access and control their data through the e-Estonia portal, and can see who accessed
their information and why
29
.
2. Canada’s BizPaL
Fig 3.1: Canada’s BizPal Interface
Background: In Canada, starting or expanding a business often required navigating a
fragmented system involving federal, provincial/territorial, and municipal authorities, each with its own set of permits and licenses. This created confusion, duplication of efforts, and delays, especially for small and medium enterprises (SMEs). To address this challenge and streamline business compliance, Canada’s Innovation, Science and Economic Development (ISED) launched BizPaL (Business Permits and Licences).
Solution: BizPaL
30
is an online portal that consolidates regulatory requirements from all
levels of government, helping entrepreneurs identify and apply for necessary permits and
licenses quickly and accurately.
Key features of the portal include:
Personalized Application: Users receive a customized list of required permits based
on inputs like business type, location, and operations.
Step-by-Step Guidance: The platform walks users through compliance in an easy-
to-understand manner.
Cross-Government Coverage: It integrates federal, provincial/territorial, and
municipal regulations.
29 https://e-estonia.com/interoperability-as-the-meeting-point-for-a-digital-nordic-league
30 https://bizpal.ca/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 21
Enabling Infrastructure: Managed by ISED in collaboration with 600+ participating
jurisdictions across Canada. Close coordination between ISED and local governments
ensures up-to-date and jurisdiction-specific content. There are common templates and
information protocols which ensures that data from multiple government tiers is aligned.
The portal is cloud-based, multilingual (English/French), and designed to support a wide
range of business types and regulatory variations.
3. Singapore’s GoBusiness Licensing Portal
Background: Singapore has recognized as one of the most business-friendly countries
in the world. However, entrepreneurs previously faced delays in licensing, requiring interactions with multiple government agencies for approvals. Each agency had its own forms, portals, and timelines, creating redundant data submissions, confusion, and delays, especially for startups and SMEs. In response, the Government of Singapore launched
the GoBusiness Licensing Portal as part of its Smart Nation strategy, to centralize and streamline all business-facing regulatory processes.
Fig 3.2: Singapore’s GoBusiness Licensing Portal Interface
Solution: Launched in 2019, the GoBusiness Licensing Portal
31
is a single digital gateway
that integrates licensing, registration, and advisory services across agencies. It offers:
License Recommendation Engine: Users input business type, activities, and location,
then the system suggests only the relevant licenses.
Integrated Application System: Businesses apply for multiple licenses from over
40 agencies via a single unified interface.
Guided Journeys: Step-by-step workflows for business setup, expansion, and
closure.
One-Stop Access: Includes tools for applying for grants, checking permit status,
and accessing business support schemes.
31 https://www.gobusiness.gov.sg/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 22
Enabling Infrastructure: Government Technology Agency (GovTech) led the digital design,
ensuring mobile-first, secure, and intuitive user experience. Powered by Singapore’s
National Digital Identity (Singpass) and MyInfo Business, the portal allows data auto-fill
from government records
32
. APIs connect systems from agencies like URA, SFA, NEA,
MOM, and ACRA removing duplication and enabling parallel processing.
BOX 3.1: OTHER INTERNATIONAL BEST PRACTICES
Germany’s Einheitlicher Ansprechpartner (EA): It is a digital one-stop shop
designed to simplify administrative procedures for businesses, particularly in line with the EU Services Directive. The platform integrates services from state and local authorities, enabling users to submit applications, upload documents, and track the real-time status of permits and licenses.
Australia’s Business Registration Service (BRS): An online platform that simplifies
the process of starting a business by integrating the registration of key business
identifiers such as the Australian Business Number (ABN), Goods and Services
Tax (GST), and business names. The platform provides a step-by-step guided
experience through a user-friendly interface, significantly reducing complexity for
new entrepreneurs. It also offers real-time status updates, enhancing transparency
and user confidence, while its mobile-friendly design ensures accessibility for users
on the go.
European Union Multi-Level Governance for Environmental Compliance: EU’s
multi-level governance approach aims to align national environmental policies
with EU-wide standards. This model requires member states to share data and
coordinate policy at local, national, and EU levels, leading to a harmonized
regulatory approach across countries. The program underscores how international
frameworks can guide national systems to converge effectively, promoting both
compliance and collaborative problem-solving.
3.2.2 Best Practices for Process Convergence
1. Merger of Similar Schemes:
Under this approach, government agencies identify and combine government schemes
with overlapping objectives or target beneficiaries. By merging similar schemes,
redundancy is minimized, allowing for more efficient use of resources and reducing
administrative overhead. This consolidation leads to improved service delivery, better
coordination, and a greater impact on the intended beneficiaries.
32 https://www.tech.gov.sg/products-and-services/for-businesses/corporate-transactions/gobusiness/
Other International Best Practices:
European Union Multi-Level Governance for Environmental Compliance:
EU’s multi-level governance approach aims to align national environmental
policies with EU-wide standards. This model requires member states to share
data and coordinate policy at local, national, and EU levels, leading to a
harmonized regulatory approach across countries. The program underscores
how international frameworks can guide national systems to converge
effectively, promoting both compliance and collaborative problem-solving. Achieving Efqciencies in MSME Sector through Convergence of Schemes 23
Some of the past examples of such merger are:
Table 3.2: Merger of Similar Schemes in the past
Merged SchemeMinistry/OrganisationDetails
Vigyan Dhara
33
Department of Science and
Technology (DST)
Three umbrella schemes, merged into
a unified central sector scheme namely
‘Vigyan Dhara’ of DST. The scheme has
three broad components:
i. Science and Technology (S&T)
Institutional and Human Capacity
Building
ii. Research and Development and
iii. Innovation, Technology Development,
and Deployment.
Pradhan Mantri
Anusuchit Jaati
Abhyuday Yojana
(PM-AJAY)
34
Department of Social Justice
and Empowerment -Unified
scheme for integrated
development of SC-majority
villages.
Combines Pradhan Mantri Adarsh Gram
Yojana (PMAGY) with two other schemes
since FY 2021-22.
2. Merge Similar Components of Schemes:
Involves achieving convergence by combining overlapping components from different
schemes. Instead of managing separate schemes that contain similar elements, these
components can be merged to create a more focused and effective initiative. Some
of the examples are:
Table 3.3: Merger of Similar Components in the past
Example MinistryDescription
Technology
Business
Incubator
(TBI)
35
Ministry of
MSME
The TBI component under the ASPIRE scheme has been discontinued
due to its convergence with the Incubation Scheme of the Ministry of
MSME. However, all TBIs approved until March 31, 2021, will continue
to receive financial assistance for the procurement of plant and
machinery according to the previous guidelines applicable to TBIs.
33 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2048574
34 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1982754
35 https://aspire.msme.gov.in/WriteReadData/DocumentFile/ASPIRE_NEW.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 24
MSME
Champions
Scheme
36
Ministry of
MSME
The MSME Champions scheme was formulated by the Standing
Finance Committee (SFC) by merging all six components of the
erstwhile Technology Upgradation Scheme (TUS). This holistic
approach aims to unify, synergize, and converge various schemes
and interventions toward a single purpose: modernizing processes,
reducing waste, enhancing business competitiveness, and facilitating
national and global reach and excellence for clusters and enterprises.
The MSME Champions scheme includes 3 components:
• MSME- Sustainable (ZED)
• MSME- Competitive (LEAN)
• MSME-Innovative (focused on incubation, intellectual property
rights, design, and digital MSME)
3. Streamlining to Create an Umbrella Scheme:
Streamlining involves consolidating smaller schemes under a larger, comprehensive
“umbrella scheme.” This approach reduces administrative overhead, ensures better
coordination among various initiatives, and provides holistic support to beneficiaries.
By grouping related programs, the government can enhance efficiency and improve
the overall impact of its policies.
Table 3.4: Umbrella Schemes
Example MinistryDescription
Mission Poshan
2.0, Mission
Vatsalya and Mission
Shakti
37
Ministry of
Women
and Child
Development
Based on common themes, all major schemes of
the Ministry have been classified under 3 umbrella
schemes.
National Handloom
Development
Programme
38
Ministry of
Textile
The NHDP has been formulated for the financial years
2021-22 to 2025-26, focusing on the integrated and
holistic development of handlooms and the welfare of
handloom weavers. It includes several components:
A. Small Cluster Development Programme
B. Handloom Marketing Assistance
C. Need-based Special Infrastructure Project
D. Mega Cluster Development Programme
E. Concessional Credit/Weaver MUDRA Scheme
F. Handloom Weavers’ Welfare
G. Other Miscellaneous & Promotional Components
36 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1786356
37 https://pib.gov.in/Pressreleaseshare.aspx?PRID=1703147
38 https://handlooms.nic.in/assets/img/Final%20Revised%20%20Guidelines%20NHDP%2012.04.2023.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 25
4. Collaborative Centre-State Convergence:
Promotes cooperation between central and state governments to align their programs
and schemes. By sharing resources and responsibilities, this model ensures that
initiatives are tailored to local needs while simultaneously meeting national objectives.
There are several examples of this, some of which are given below.
Table 3.5: Collaborative Centre-State Convergence
Example
Ministry /
Organisation
Description
Uttar Pradesh:
Convergence of
One District One
Product (ODOP)
and National
Export Promotion
Programs
39
Ministry of
Commerce
& Industry
(DGFT), State
MSME & Export
Promotion
Department
The UP MSME & Export Promotion Department promotes
district-specific products under ODOP, focusing on
branding, capacity building, and infrastructure. This
scheme is operationally converged with DGFT’s
Districts as Export Hub
40
, enabling ODOP units to
benefit from central export schemes like RoDTEP
and TIES. The result is a unified ecosystem offering
shared marketing, logistics, financial support, and duty
remission -empowering artisans and small producers to
access domestic and international markets.
Tamil Nadu:
Convergence
of State Food
Processing Policy
with Central
Schemes
41
Ministry of Food
Processing
Industries
(MoFPI),
Tamil Nadu
Department
of Agricultural
Marketing &
Agri-Business
(DAM&AB)
The Tamil Nadu Food Processing Policy 2018 identifies
the Department of Agricultural Marketing & Agri-
Business (DAM&AB) as the nodal agency responsible
for implementing food processing initiatives in the
state. A core focus of the policy is to facilitate
convergence between state-level support and central
government schemes such as the Pradhan Mantri Kisan
SAMPADA Yojana (PMKSY), PMFME, and schemes
from MSME, National Horticulture Board (NHB), and
National Horticulture Mission (NHM). Through this
convergence, the state enables start-ups, MSMEs,
and agro-entrepreneurs to access capital subsidies,
infrastructure support, and market linkages across both
levels of government. The approach encourages the
leveraging of dual funding for eligible food processing
units and promotes the use of shared infrastructure
such as common processing centres, cold chains, and
food parks.
Andhra Pradesh:
Convergence
of Electronics
Promotion Policy
and National
Programs
Ministry of
Electronics and
IT (MeitY), State
IT & Electronics
Department
The state’s electronics manufacturing policy offers
capital subsidies, power incentives, and interest rebates,
which are designed to stack with central schemes like
the PLI for Electronics and initiatives under Make in
India and Digital India.
39 https://odopup.in/en/page/introduction
40 https://www.pib.gov.in/PressReleasePage.aspx?PRID=1897408&utm
41 https://cms.tn.gov.in/cms_migrated/document/GO/agri_e_ms_272_am3_2018.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 26
5. Inter-ministerial Convergence:
Involves different ministries collaborating to achieve shared goals, breaking down silos
that often hinder effective governance. By pooling expertise, funding, and resources,
this approach addresses issues that span multiple domains, such as rural development
or social welfare.
There are several examples of collaborative Centre-State and Inter-ministerial Convergence.
Some of which are given below.
Table 3.6: Inter-ministerial convergence
ExampleMinistryDescription
Convergence
Between Mahatma
Gandhi NREGA
42
and
(i) Catalytic
Development
Programme
(ii) Rubber Board
Ministry of
Textiles,
Ministry of Rural
Development
(MoRD)
Ministry of
Commerce &
Industry,
Ministry of Rural
Development
(MoRD)
Sericulture in India, supported by the Central Silk
Board under the Ministry of Textiles, is a major
rural livelihood activity generating employment
for 7.5 million people. The sector benefits from
convergence between MGNREGA and the Ministry’s
Catalytic Development Programme, enabling better
resource utilization, transparency, and local need-
based planning through Panchayati Raj Institutions.
This synergy enhances rural development, women’s
empowerment, and economic equity.
The Rubber Board, under the Ministry of Commerce
& Industry, supports sustainable rural livelihoods
through rubber plantations via two key schemes,
Rubber Plantation Development Scheme (RPD) and
Rubber Development in North East (RDNE). These
schemes provide early-stage support, skill building,
value addition, and market linkages. A convergence
framework with MGNREGA has been introduced to
leverage labour and resources for rubber cultivation,
ensuring long-term income and market access for
rural communities.
42 https://nrega.nic.in/MGNREGA_new/convergence.aspx Achieving Efqciencies in MSME Sector through Convergence of Schemes 27
ExampleMinistryDescription
(iii) Horticulture
Department
Ministry of
Agriculture &
Farmers’ Welfare
(MoA&FW),
Ministry of Rural
Development
(MoRD)
The Horticulture Department under the Ministry of
Agriculture & Farmers’ Welfare (MoA&FW) promotes
convergence with MGNREGA (Ministry of Rural
Development) to enhance nutrition, income, and
livelihoods through horticulture. Convergence is
planned under the Mission for Integrated Development
of Horticulture (MIDH) and National Horticulture
Mission (NHM), with training support extended to
officials and community resource persons under
NRLM.
Ministry of Railways
and MGNREGA
Convergence for
Infrastructure
Development
43
Ministry of
Railways,
Ministry of Rural
Development
(MoRD)
Collaboration focuses on developing rural
infrastructure, including approach roads, level
crossings, and rail embankment maintenance.
MGNREGA provides unskilled labour, while the
Ministry of Railways provides technical expertise and
top-up payments. This improves connectivity and
reduces logistical barriers for MSMEs.
Departments of
Women & Child
Development
(DWCD) and Health
& Family Welfare
(DHFW)
44
Ministry of Health
& Family Welfare
(DHFW)
The convergence framework between the DoHFW
and DWCD under the National Health Mission involves
coordinated service delivery at the grassroots level,
particularly through platforms like Village Health and
Nutrition Days (VHNDs). It ensures collaboration in
service provision, joint training of frontline workers
(AWWs, ASHAs, ANMs), shared monitoring tools,
and integrated planning for maternal and child health,
nutrition, and family welfare programs.
PM Vishwakarma
45
Ministry of Micro,
Small & Medium
Enterprises
(MoMSME),
Ministry of Skill
Development &
Entrepreneurship
(MSDE),
Department of
Financial Services
(DFS), Ministry of
Finance
Launched on 17 September 2023 by the Government
of India, PM Vishwakarma is a flagship initiative aimed
at supporting traditional artisans and craftspeople
engaged in 18 trades such as carpentry, blacksmithing,
pottery, etc. It offers formal recognition through a
PM Vishwakarma certificate and ID, skill training with
stipends, a toolkit incentive of `15,000, and collateral-
free credit up to `3 lakh at a concessional interest
rate of 5%, with credit guarantees supported by
CGTMSE. By combining skilling, financial access, and
market linkages, PM Vishwakarma serves as a model
for inter-ministerial convergence to empower India’s
traditional workforce.
Case Study: National Best Practices
43 https://nrega.nic.in/MGNREGA_new/convergence.aspx#:~:text=Ministry%20of%20Railways,of%20the%20
works%20in%20convergence.&text=Protection%20work%20of%20existing%20railway%20embankment/
cutting/bridges.
44 https://nhm.gov.in/index1.php?lang=1&level=2&sublinkid=1084&lid=149
45 https://pmvishwakarma.gov.in/cdn/MiscFiles/eng_v30.0_PM_Vishwakarma_Guidelines_final.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 28
CASE STUDY: NATIONAL BEST PRACTICES
1. Maharashtra: Convergence of MSE-CDP and State Industrial Cluster
Development Program
Background: The Government of Maharashtra and the Ministry of MSME, Government
of India, initiated programs to support cluster development in Maharashtra. At the
central level, the Micro & Small Enterprises – Cluster Development Programme
(MSE-CDP) was introduced to assist in the creation of Common Facility Centres
(CFCs) and infrastructure support. Simultaneously, Maharashtra had its own State
Industrial Cluster Development Program, focused on strengthening traditional and
emerging industrial clusters.
Fig 3.3: Maharashtra State Enterprises-Cluster Development Programme
Solution: The Government of Maharashtra adopted a convergence strategy by aligning
its State Cluster Development Program with the centrally sponsored MSE-CDP
46
. This
dual-level approach ensured shared responsibilities, pooled funding, and synchronized
implementation. The convergence enhances productivity, reduces operational costs, and
boosts MSME competitiveness by creating modern cluster-level infrastructure and facilities.
The state’s Directorate of Industries plays a pivotal role, in collaboration with the Ministry of
MSME, through its Special Purpose Vehicle (SPV) model which serves as the implementing
entity. Operating under a Public-Private Partnership (PPP) model, SPVs are responsible
for the establishment and operation of Common Facility Centres (CFCs). These CFCs
cater to the shared needs of cluster units by offering Research and Development (R&D)
support, Product testing and quality certification, Common processing facilities, Packaging
and branding services.
46 https://www.doingbusinessinmaharashtra.org/MSE-CDP.php Achieving Efqciencies in MSME Sector through Convergence of Schemes 29
Under the MSE-CDP framework:
Up to 70% of project cost is funded by the Ministry of MSME for CFCs.
60% assistance is available for infrastructure development projects like roads,
power distribution, and water supply.
The remaining cost is shared between the State Government and the SPV (cluster
stakeholders).
By synchronizing the state’s financial assistance with this central funding, Maharashtra
enables clusters to leverage dual benefits, thereby reducing the financial burden
on individual enterprises.
Cluster Identification and Project Development
The Directorate of Industries, Government of Maharashtra, plays a pivotal role in:
Identifying potential clusters based on sectoral strength and needs
Conducting diagnostic studies and preparing Detailed Project Reports (DPRs)
Coordinating with the Ministry of MSME for approvals and fund release
Impact: More than 12,000 small-scale industries across multiple sectors have directly
benefited from the converged scheme implementation. Clusters have witnessed reduced
production costs due to shared machinery and infrastructure, improved product quality
and market competitiveness, enhanced access to export markets through better branding
and certification, the converged program has promoted inclusive industrial growth in both
developed and backward regions of Maharashtra.
2. Raising and Accelerating MSME Performance (RAMP)
Background: To overcome challenges like limited access to finance, inadequate market
linkages, low productivity, and fragmented support mechanisms across states and ministries the Government of India, the Ministry of MSME with support from the World Bank, launched the RAMP (Raising and Accelerating MSME Performance) program in 2022, with a total outlay of `6,062 crore (USD 808 million)
47
.
Solution: RAMP aims to transform the MSME ecosystem by addressing systemic constraints through:
Improved access to markets and credit
Technology adoption and green practices
Better Centre-State policy coordination
Institutional capacity-building
It incentivizes states to develop their Strategic Investment Plans (SIPs) for MSME development, which are then evaluated and co-funded by the central government through the Ministry of MSME.
47 https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1844602 Achieving Efqciencies in MSME Sector through Convergence of Schemes 30
Enabling Infrastructure: Governed by National Steering Committee under Secretary (MSME).
Credit Monitoring Committee involves members from MoMSME, Ministry of Finance, RBI,
SIDBI, CGTMSE. SIPs are submitted by State MSME Departments with detailed policy
actions, capacity-building plans, and cluster strategies. Promotes use of Udyam Portal,
MSME Champions platform, and Trade Receivables Discounting System (TReDS).
CASE STUDY: INTERNATIONAL BEST PRACTICES
1. United Kingdom’s Universal Credit
Background: Before 2013, the UK welfare system was fragmented across six major income-
related benefits: Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support, Working Tax Credit, Child Tax Credit, and Housing Benefit. These were administered separately by various departments (DWP, HMRC, local authorities), causing inefficiencies, duplication, and confusion for claimants.
Solution: Universal Credit
48
replaced these six benefits with a single, consolidated monthly
payment based on individual circumstances. The system merges functions, eligibility
checks, and payment mechanisms into a unified digital service.
Key features include:
Unified eligibility and application: One integrated claim for all income-related
support.
Real-time income updates: Links with HMRC Real-Time Information (RTI) enable
automatic earnings assessment.
Single taper and conditionality: A consistent withdrawal rate applied as income
increases, with standardized conditionality and sanctions.
Enabling Infrastructure: A single portal for applications, updates, and interactions.
Integration with HMRC (for income), Department for Work and Pensions (DWP), Jobcentre
Plus, and local authorities. This Eliminated manual eligibility checks and legacy-enforcement
errors. Legislation under Welfare Reform Act 2012 enabled seamless merging of schemes
and regulatory coherence.
2. Australia - Regional Rail Revival
Background: Regional Victoria’s rail network suffered from decades of underinvestment and fragmented oversight. Pre-2017, rail upgrades were managed separately by state and federal agencies, resulting in disjointed planning, delays, and inefficiencies in improving regional transport infrastructure
49
.
Solution: Launched in 2017, Regional Rail Revival is a large-scale, joint federal state infrastructure initiative aimed at upgrading Victoria’s regional rail lines. It merges multiple rail upgrade projects (including Regional Fast Rail and Regional Network Development) into a unified program with clear objectives and streamlined execution.
48 Policy paper Government Transformation Strategy appendix: case studies (2017)
49 https://www.audit.vic.gov.au//report/freight-outcomes-regional-rail-upgrades Achieving Efqciencies in MSME Sector through Convergence of Schemes 31
Key features:
Unified project framework covering track, signaling, station, and level crossing
improvements.
Joint funding model: Primarily funded by the Australian Government, with the
Victorian State Government as a co-investor.
Delivery managed under a single governance entity - Rail Projects Victoria -
ensuring integrated planning, procurement, and implementation.
Enabling Infrastructure: A bilateral agreement defines roles, responsibilities, and financial
contributions between federal and state governments. Rail Projects Victoria provides
oversight, procurement, and program coordination. Shared standards, timetables, and
quality controls ensure consistent execution across multiple rail corridors.
The examples and case studies explored in this chapter demonstrate how convergence, whether through information systems, inter-ministerial collaboration, or centre-state partnerships, can significantly enhance the efficiency, outreach, and impact of MSME support mechanisms. By breaking silos and aligning efforts across government levels and departments, convergence creates a more responsive and streamlined policy ecosystem. In the next chapter, the existing MSME schemes are analysed, drawing out their commonalities, distinct features, and on-ground insights gathered through stakeholder consultations, to better understand what enables or hinders effective delivery. 04
INSIGHTS ON
CONVERGENCE
OPPORTUNITIES Achieving Efqciencies in MSME Sector through Convergence of Schemes 34
4.1. METHODOLOGY
This study identifies convergence opportunities within Ministry of MSME (MoMSME)
schemes through:
i. Secondary Research
ii. Stakeholder Consultation Workshops
The premise for consulting the stakeholders was set by analysing the schemes. From these scheme guidelines certain similarities emerged, basis which an implementation framework and convergence model was created.
The series of six stakeholder consultation workshops included representatives from
industry associations, government officials, bankers, and enterprises. A stratified sampling
method was used to ensure that all key strata, including industry sectors and regions,
were adequately represented. Six FGDs conducted between June to September 2024:
Table 4.1: Details of Six workshops
Workshop
Location
Sectors
1 2 3 4 5 6
Mumbai,
Maharashtra
Textiles Pharma Chemicals Automobile Engineering Leather
Lucknow,
UP
Food
Products
Hosiery and
Garments
Metal
Products
Cotton
textiles
Ceramics
Wool, Silk,
Synthetic
Fibre
Textiles Achieving Efqciencies in MSME Sector through Convergence of Schemes 35
Chennai, TN Coir Automobile
Food
Processing
Textiles
Leather &
Footwear
Precision
Engineering
Tiruppur, TN Coir Automobile
Food
Processing
Textiles
Leather &
Footwear
Precision
Engineering
Guntur, AP
Pharma
& Life
Science
Defence and
Precision
Engineering
Electronics
Food
Products
IT Services -
Hyderabad,
TS
Pharma
& Life
Science
Defence and
Precision
Engineering
Electronics
Food
Products
IT Services -
Additionally, a series of Focus Group Discussions (FGDs) were also conducted with key
stakeholders, including MSME Secretary and other senior officials from the Ministry of MSME
and representatives from the banking sector. A total of 98 stakeholders were consulted
throughout the study to help refine the proposed convergence recommendations.
Table 4.2 Details of FGDs with MoMSME and Bankers
Focussed Group Discussions during August– September 2024
Focussed GroupLocation Participants
Ministry of MSME New Delhi
Secretary
Additional Secretary & Development Commissioner
Additional Development Commissioner
Joint Development Commissioner
Joint Secretary
Joint Director
Deputy Director
Bankers Virtual
General Manager - Bank of Baroda
General Manager - SIDBI
General Manager - State Bank of India
General Manager - Canara Bank
Quantitative inputs on the following parameters were captured:
Awareness & Accessibility of Schemes
Level of awareness among beneficiaries about various government schemes.
Sources of information used by MSMEs to learn about schemes.
Ease of access to scheme-related guidelines and application procedures.
Reasons for non-participation in available schemes. Achieving Efqciencies in MSME Sector through Convergence of Schemes 36
Challenges & Barriers in Scheme Utilization
Common hurdles faced in the application and approval process.
Procedural and documentation challenges affecting scheme uptake.
Time taken from application to fund disbursement.
Percentage of applicants who abandoned the process due to complexity.
Duplicity & Convergence of Schemes
Extent of overlap between different schemes offering similar benefits.
Cases of MSMEs availing multiple schemes for the same purpose.
Challenges in navigating multiple schemes simultaneously.
Role of different departments/institutions in guiding beneficiaries toward the right
schemes.
Need and demand for a single-window system for MSME schemes.
4.2. MINISTRY OF MSME SCHEMES: SIMILARITIES AND
UNIQUENESS
To support and nurture the MSME sector, the Ministry of MSME implements 18 schemes
focused on addressing key challenges related to credit access, infrastructure development,
technology adoption, innovation, and market expansion. This section provides a detailed
review of these schemes, highlighting their core objectives, areas of intervention, and
target beneficiaries. It also examines overlaps and complementarities across schemes,
identifying both unique features and areas of convergence that can inform streamlined
policy implementation.
The Prime Minister’s Employment Generation Programme (PMEGP) is a central sector
scheme, administered by the Ministry of Micro, Small, and Medium Enterprises (MoMSME).
It was created by merging two earlier schemes: Prime Minister’s Rojgar Yojana (PMRY)
and Rural Employment Generation Programme (REGP). Under the Scheme, Margin Money
(Subsidy) is provided to individuals availing loan from banks for setting up new enterprises.
Since inception of the scheme from FY 2008-09, more than 9.65 lakh micro enterprises
have been assisted across the country with a Margin Money (MM) subsidy of more than
Rs. 25,263.33 Crore providing estimated employment to 78.84 lakh persons
50
.
50 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2035100) Achieving Efqciencies in MSME Sector through Convergence of Schemes 37
0.00
1,000.00
2,000.00
3,000.00
4,000.00
2019-20 2020-21 2021-222 022-23 2023-24
PMEGP Target Vs Achieved (Disbursement)
Margin Money to be utilized. (Rs. Cr.)
Margin money subsidy utilized (Rs Cr.)
Figure 4.1: PMEGP Target Vs Achieved (Disbursement)
Table 4.3: PMEGP Snapshot
1. Prime Minister’s Employment Generation Programme (PMEGP)
Components
Credit Assistance: Financial support is provided as a
combination of beneficiary contribution, bank credit,
and government subsidy.
Skill Development: Reputed NGOs, SHGs, and
institutions provide entrepreneurship development
training to beneficiaries.
Quantum of Assistance2025-26 (BE) (in crores)
Beneficiaries are required to contribute
5-10% of the project cost, based on their
category.
Subsidy for General Category: 15%
(Urban), 25% (Rural)
Subsidy for Special Category: 25%
(Urban), 35% (Rural)
Rs. 2954.42 Cr.
51
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust
established by the Government of India and SIDBI; it implements and manages the Credit
Guarantee Scheme for Micro and Small Enterprises (CGSMSE) which is a scheme to provide
collateral-free credit to MSEs. CGTMSE is the implementing body, while CGSMSE is the
financial scheme providing guarantees. CGSMSE provides collateral-free credit support
to Micro and Small Enterprises (MSEs) through a credit guarantee for loans extended by
Member Lending Institutions like banks, financial institutions, and Non-Banking Financial
Companies (NBFCs). Since its inception, the CGSMSE scheme has successfully provided
51 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 38
credit guarantee coverage to over 67 lakh beneficiaries across more than 100 industrial
sectors. The cumulative guarantee amount sanctioned under all schemes reached `4,24,597
crore as of March 2023, with a total of 1,10,83,693 guarantees approved
52
. The scheme
was provided with an additional corpus support of `9,000 crore in the Union Budget for
FY 2023-24
53
to revamp its Scheme to provide guarantee for additional `2 lakh crore to
Micro & Small Enterprises.
Table 4.4: CGTMSE Snapshot
2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Components
Credit Assistance: Financial support is provided as a combination of beneficiary
contribution, bank credit, and government subsidy.
Quantum of AssistanceBudget
Micro Enterprises: Up to 85% coverage for loans up to
`5 lakh, and 75% for loans above `5 lakh and up to `500
lakh. Micro and Small Enterprises (MSEs) in North East
Region and other Special Categories: 80%-85% coverage
depending on the borrower profile and credit amount. All
other MSE borrowers: 75% coverage.
The scheme is being revamped as
the approved corpus of
`9,000
crore has already been achieved.
54
The Self-Reliant India (SRI) Fund is a Fund of Funds (FoF) initiative launched by the
Government of India in 2020 as part of the Aatmanirbhar Bharat package. Managed by
NSIC Venture Capital Fund Limited (NVCFL), a subsidiary of the National Small Industries
Corporation (NSIC), the SRI Fund aims to provide equity capital rather than loans to MSMEs.
The scheme involves investing in daughter funds managed by professional investment
firms, which in turn, provide growth capital to promising MSMEs. The total provision of
the fund is Rs. 50,000 crores, with Rs. 10,000 crores from the Government of India and
Rs. 40,000 crores through Private Equity/Venture Capital Funds
55
. Till June 2024, total
53 Daughter Funds have been empanelled by way of investing more than Rs. 8,353 crore,
and 450 potential MSMEs have been assisted
56
.
Table 4.5: SRI Fund Snapshot
3. Self-Reliant India (SRI) Fund
Components
Credit Assistance: To boost equity or equity-like
financing for MSMEs.
Quantum of Assistance2025-26 (BE) (in crores)
Equity and Quasi-Equity Financing for MSMEs Rs. 700 Cr.
57
52 Press Information Bureau (https://pib.gov.in/PressReleasePage.aspx?PRID=1982308)
53 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1920289)
54 Source: https://msme.gov.in/sites/default/files/FINALMSMEANNUALREPORT2023-24ENGLISH.pdf
55 Press Information Bureau (https://pib.gov.in/PressReleseDetailm.aspx?PRID=1943193®=3&lang=1)
56 Press Information Bureau (https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2041681®=3&lang=1)
57 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 39
The Procurement and Marketing Support (PMS) Scheme was launched to enhance the
marketability and competitiveness of Micro and Small Enterprises (MSEs) in domestic
and international markets. The scheme aims to support the marketing activities of MSEs,
helping them explore and access new markets.
Table 4.6: PMS Snapshot
4. Procurement and Marketing Support (PMS) Scheme
Components
Marketing Assistance: Promoting Domestic & International Market Access for MSEs.
Capacity Building: Vendor Development Program consisting of training on various
aspects related to Government e-Marketplace (GeM) and exhibition of products.
Quantum of Assistance
2025-26 (BE)
(in crores)
Market Access Initiative: 80% of space rent charges for general
category MSEs and 100% for Special Category
Capacity Building: 80% reimbursement for adoption of bar code,
Adoption of Modern Packaging Techniques, Financial assistance
on annual membership fee for adoption of E-Commerce Platform
Development of Retail Outlet: Rs. 30 lakh max per outlet in Metro &
A class cities and Rs. 20 lakh max per outlets for other cities
Rs. 65 Cr.
58
International Cooperation Scheme promotes international marketing opportunities to
MSMEs by providing financial assistance on reimbursement basis for airfare, space rent,
freight charges, advertisement & publicity charges, entry/registration fee, registration-cum-
membership certificate charge/fee, export insurance premium. Till 2023-24, Rs. 19,57,533
was released to 300 MSMEs
59
in form of support for trade fairs, buyer-seller meets, etc.
Table 4.7: International Cooperation Snapshot
5. International Cooperation Scheme
Components
Marketing Assistance: Promoting International Market Access for MSMEs.
Capacity Building: Capacity Building of First Time MSE Exporters (CBFTE).
Quantum of Assistance
2025-26 (BE)
(in crores)
Participation in international exhibitions/trade fairs and buyer-seller
meets: Up to 100% of the airfare and space rent for MSME delegations.
International conferences and seminars and Business delegations:
75% of the cost of air travel for MSME representatives and up to 75%
of the registration fees.
Rs. 27 Cr.
60
,
61
58 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
59 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1987719)
60 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
61 SPIC Budget Achieving Efqciencies in MSME Sector through Convergence of Schemes 40
Table 4.8: Similarities and Uniqueness of Procurement and
Marketing Scheme & International Cooperation Scheme
Procurement and Marketing
Support
International Cooperation Scheme
Assistance to MSMEs
Facilitate international market
access
Facilitate international market access
Capacity buildingCapacity building
Organizing and participating in
International trade fairs/exhibitions
Organizing and participating in International
trade fairs/exhibitions
Domestic marketing assistanceX
X
Export Insurance, Registration-cum-Membership
Certificate (RCMC) fee for first-time exporters
XTesting & Quality Certification fee assistance
A Scheme for Promotion of Innovation, Rural Industries & Entrepreneurship (ASPIRE)’s
main objective is promoting entrepreneurship and employment generation in agro-rural
sector with special focus on rural and underserved areas. During 2023, 5 new Alternative
Investment Funds (AIFs), were supported with a commitment of Rs. 145 crores taking the
total commitment to Rs.217.50 crore to 11 AIFs, out of the total corpus of Rs. 310 crores
62
.
Four new Livelihood Business Incubator (LBIs) were approved and 25,468 beneficiaries
were trained, out of which 1,458 were wage employed. 225 micro-enterprises were
established via the incubation programs conducted in the LBIs
63
.
Table 4.9: ASPIRE Snapshot
6. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
Components
Innovation: Livelihood Business Incubator (LBI): An entity set up for
imparting skill development and incubation programs
Credit Assistance: FoF - Invest through Alternate Investment Funds
(AIFs), in early-stage scalable start-ups in need of support and nurturing
to succeed in developing technology
Quantum of Assistance
2025-26 (BE)
(in crores)
Setting up LBIs: One-time grant of 100% of cost of Plant & Machinery
other than the land and infrastructure or an amount up to 1NR 100
Iakh, whichever is less to be provided.
Rs. 20 Cr.
64
62 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1992842)
63 Press Information Bureau (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1992842)
64 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 41
MSME Champions scheme has been formulated through Standing Finance Committee
(SFC) by merging all 6 components of Technology Upgradation Scheme (TUS). The end
objective is to pick up clusters and enterprises and modernize their processes, reduce
wastages, sharpen business competitiveness and facilitate their National and Global reach
and excellence. There are 3 components under the new MSME Champions scheme, the
details of which are as below:
1. MSME-Sustainable (ZED) - to create awareness amongst MSMEs about Zero
Defect Zero Effect (ZED) practices and motivate and incentivize them for ZED
Certification
2. MSME-Competitive (Lean) - for enhancing the competitiveness of MSME Sectors
through implementation of Lean Tools and Techniques. Lean Tools and Techniques
are a tested and proven methodology for improving the competitiveness of
MSME sector.
3. MSME-Innovative (for Incubation, IPR, Design and Digital MSME) - a combination
of innovation in incubation, design intervention and by protecting IPR in a single
mode approach to create awareness amongst MSMEs about India’s innovation
The Digital MSME will be interlinked with all the other components of the MSME Champions
Scheme.
Table 4.10: MSME Champions Snapshot
7. MSME Champions
Components
Technology Upgradation: This is an umbrella scheme incentivizing MSMEs
to reduce wastage, improve competitiveness, integrate digitalization, offer
incubation support for innovative ideas.
Quantum of Assistance
2025-26 (BE)
(in crores)
Subsidy on cost of ZED certification – 80/60/50% for Micro, Small and
Medium Enterprises.
Financial Assistance to Host Institute for developing and nurturing the ideas
shall be provided up to maximum of Rs. 15 lakh per idea to HI.
90% subsidy on Total Cost of Implementation of Lean Tools and Techniques
at three different levels – Basic, Intermediate, and Advanced.
Rs. 54.72 Cr
65
.
65 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 42
Table 4.11: Similarity between ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)
Similarity
MSME
Innovative
Skill Development: Offers SDI to
entrepreneurs in the MSME sector.
Focus on Tech: Promote technological
advancement and innovation in MSMEs.
Support for incubation and business
development: Providing financial
support to foster innovation
ASPIRE
Special Focus:
Rural Areas
The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched in
2005-06 for making Traditional Industries more productive and competitive by organizing
the Traditional Industries and artisans into clusters to provide support for their long-term
sustainability and economies of scale. The scheme was revamped in 2014-15.
Table 4.12: SFURTI Snapshot
8. Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
Components
Hard Intervention (Infrastructure): Creation of common facility centres, raw
material banks, upgradation of production infrastructure, warehousing facility,
tools and technological upgradation
Soft Intervention (Skill Development): Build general awareness, counselling,
skill development and capacity building, exposure visits, market development
initiatives
Thematic Interventions: Interventions on a cross-cutting basis for brand building,
new media marketing, e-commerce initiatives, research and development
Quantum of Assistance2025-26 (BE) (in crores)
The financial assistance provided for any specific project shall be
subject to a maximum of Rs. 5 (five) crore to support Soft, Hard
and Thematic interventions.
Rs. 362 Cr.
66
Micro and Small Enterprises-Cluster Development Programme (MSE-CDP) was
implemented for the development of clusters across country for creation of tangible
‘assets’ i.e. Common Facility Centres (CFCs) to address the common issues such as
improvement of technology, skills, quality etc. As per a report of Evaluation Study of
MSE-CDP conducted by the National Productivity Council, the scheme has been able
to strengthen and improve the efficiency of the value chain of the units in the cluster
66 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 43
resulting into overall productivity growth of around 10-15% and growth in turnover in the
range of 20-30%
67
.
Table 4.13: MSE-CDP Snapshot
9. Micro and Small Enterprises-Cluster Development Programme (MSE-CDP)
Components
Hard Intervention (Infrastructure): Common facility centres (for testing,
training centre, raw material depot, effluent treatment, complementing
production processes, etc
Soft Intervention (Skill Development): To build capacity of MSEs for
common supportive action through formation of self-help groups,
consortia, upgradation of associations
Quantum of Assistance
2025-26 (BE)
(in crores)
For preparation of Diagnostic Study Report (DSR) - Rs. 2.50 lakhs and
for field organization of Ministry of MSME up to Rs. 1.00 lakh.
For Soft Intervention - 75% of sanctioned amount, with maximum project
cost of Rs. 25 lakh per cluster.
Rs. 410 Cr.
68
Table 4.14: Similarity between MSE-CDP and SFURTI
Implementing AgencyDC-MSME
SFURTISimilarityMSE-CDP
Soft Interventions - Skill Development, Capacity Building,
Exposure Visits, Market Promotion Initiatives
Hard Intervention - Common facility centres, procuring
machinery, providing Raw Material Banks, warehousing,
and training centers
Development of land – Land, roads, drainage, power
distribution in new/existing industrial (multi-product)
areas/estates/Flatted Factory Complex
Focus - Penetrating uncovered districts, aspirational
districts for setting up collectives. Focus on traditional
industries with special focus on endangered art/crafts
NGOs, Institutions of
the Central and State
Governments, PRIs
67 Evaluation Study of MSE-CDP (https://www.dcmsme.gov.in/schemes/Evaluation-Study-of-MSE-CDP-by-
NPC.pdf)
68 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 44
Entrepreneurship and Skill Development Programme (ESDP) was launched by the office
of Development Commissioner Ministry of Micro, Small & Medium Enterprises (O/o DC-
MSME) under “Development of MSMEs” vertical. The objective of the programme is to
motivate young persons to consider self-employment or entrepreneurship as one of the
career options.
Table 4.15: Skill Development Snapshot
10. Entrepreneurship and Skill Development Programme (ESDP)
ComponentsSkill Development
Quantum of Assistance
2025-26 (BE)
(in crores)
Entrepreneurship Awareness Programme (EAP)-One Day training
programme is conducted for Entrepreneurship awareness
Entrepreneurship cum Skill Development Programme(E-SDP) - Six weeks
training programme for Entrepreneurship & Skill Training
Advance E-SDP: The One Week Advance ESDP programmes
Management Development programme (MDP)- One-week training
programme for Management capacity building
Advance MDP: One Week Advance MDP Training Programmes State
Administrative Training Institutes (ATIs)
Rs. 96 Cr.
69
The objective of the Assistance to Training Institutions (ATI) Scheme is to strengthen
capacity for training for Skill Development, entrepreneurship, providing training to staff of
DICs and related Government institutions dealing with MSMEs and strengthening overall
capacity of National Institutions under Ministry of MSME. The assistance is provided to
National level training institutions operating under the Ministry of MSME, namely, National
Institute of Micro, Small, and Medium Enterprises (NI-MSME), KVIC, Coir Board, Tool
Rooms, National Small Industries Corporation (NSIC) & Mahatma Gandhi Institute for
Rural Industrialization (MGIRI) in the form of capital grant for the purpose of creation
and strengthening of infrastructure and support for entrepreneurship development and
skill development training programmes. Assistance is also provided to existing State level
Entrepreneurship Development Institutes (EDIs) for creation or strengthening/ expansion
of their training infrastructure.
Table 4.16: ATI Snapshot
11. Assistance to Training Institutions (ATI)
Components
Skill Development: Establishing Training Institutions/EDIs to train and support
first-generation entrepreneurs
69 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 45
Quantum of Assistance
2025-26 (BE)
(in crores)
Amount of assistance will not exceed the actual amount required
for creation or strengthening/expansion of the infrastructure of the
training institution.
The maximum assistance under the scheme to a State level EDI will
be restricted to Rs. 250 lakhs.
Assistance for skill development programmes is based on the duration
of the National Skills Qualifications Framework (NSQF) compliant
training programmes
Rs. 40 Cr.
70
MoMSME has established 18 Technology Centres (TCs) earlier known as Tool Rooms
(10 Nos) and Technology Development Centres (8 Nos) spread across the country. The
Technology Centres’ primary focus is to support industries particularly MSMEs in the
country through access to advanced manufacturing technologies.
Table 4.17: Technology Centres Snapshot
12. Technology Centres
Components
Technology Upgradation: Establishing Training Institutions/ EDIs to train
and support first-generation entrepreneurs
Quantum of Assistance2025-26 (BE) (in crores)
Technological, Incubation and business advisory support to
MSMEs and skilling services to the employed/unemployed skill
seekers. Direct and indirect employment generation.
Rs. 160 Cr.
71
,
72
Promotion of MSME in NER is envisaged to provide financial support for enhancing the
productivity and competitiveness as well as capacity building of Micro, Small and Medium
Enterprises (MSMEs) in the NER and Sikkim.
Table 4.18: Promotion of MSME in NER Snapshot
13. Promotion of MSME in NER
Components
Technology Upgradation: Creation of common facilities to supplement
manufacturing, testing, packaging, R&D, product and process innovations
and training
Infrastructure Development: Create/ upgrade infrastructural facilities in
the new/existing Industrial Areas including Flatted Factory Complexes for
MSMEs
70 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
71 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
72 Tool Rooms and Technical Institutions Budget Achieving Efqciencies in MSME Sector through Convergence of Schemes 46
Quantum of Assistance
2025-26 (BE)
(in crores)
Technology Upgradation: Financial assistance up to 90% of the
total project cost (maximum Rs.13.5 Cr)
Development of Industrial Estates: Financial assistance up to 90%
of the total project cost (maximum assistance per project shall be
Rs.13.50 Crore for development of New estate and Rs. 9 Crore for
existing Industrial Estate).
Development of Tourism Sector: 90% (maximum assistance Rs.4.50
Cr.).
Rs. 95 Cr.
73
National SC-ST Hub is set up to provide professional support to SC/ST Entrepreneurs to
fulfil the obligations under the Central Government Public Procurement Policy for Micro
and Small Enterprises Order 2012, adopt applicable business practices and leverage the
Stand-Up India initiatives. The objective is to promote “enterprise culture” amongst the
SC / ST population. Various components/interventions have been introduced to cater
the needs of SC-ST MSEs in the areas of finance, technology, market linkages, capacity
building etc. with a view to provide a conducive ecosystem.
Table 4.19: National SC-ST Hub Snapshot
14. National SC-ST Hub
Components
Credit Assistance/ Marketing Assistance/ Skill Development/ Technology
Upgradation: This is an umbrella scheme covering all kinds of support to
SC/ST
Quantum of Assistance
2025-26 (BE)
(in crores)
25% subsidy on institutional finance up to Rs.1 Cr. Subsidy cap of Rs. 25
Lakhs without any sector specific restrictions on technology upgradation
The training cost will be released to training institutes on 50:40:10 pattern
50% as advance amount on approval of training proposal,
40% on training completion and submission of Utilization Certificate and,
10% on submission of outcome report.
The maximum limit on cost of toolkit is Rs. 50,000/- (including GST) per
toolkit per candidate.
The assistance under this scheme will be limited to 80% or Rs. 1,00,000/-
(excluding GST and all other applicable taxes).
Rs. 151 Cr.
74
73 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
74 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 47
Raising and Accelerating MSME Performance (RAMP) is a World Bank supported scheme
launched in 2022. Under the programme, the Centre approves Strategic Investment Plans
(SIPs) for nine states, including Rajasthan, West Bengal, and Gujarat, under the Raising
and Accelerating MSME Performance (RAMP) scheme, with a total funding of Rs 713
crore (US$ 85.49 million), aiming to reduce compliance costs and improve credit access
for micro, small, and medium enterprises. On March 30, 2022, the Indian government
allocated Rs. 6,062.45 crore (US$ 808 million) for the scheme Raising and Accelerating
MSME Performance (RAMP). The programme aims to improve market and credit access,
strengthen institutions and governance at the centre and state levels, improve centre-state
connections and partnerships, resolve late payment difficulties, and green MSMEs. Each
state can design the RAMP Programme as per the need assessment of the state.
Table 4.20: RAMP Snapshot
15. Raising and Accelerating MSME Performance (RAMP)
Components Credit Assistance/Marketing Assistance/Technology Upgradation
Quantum of Assistance
2025-26 (BE)
(in crores)
Promotes Centre-State collaboration by providing grants to States
for preparation of Strategic Investment Plan (SIP), which is a
roadmap developed by the respective State/UT for development of
the MSME sector in the State. RAMP provides grants to States/UTs
for implementing selected projects in the SIP. Since its launch, all
States and UTs (except UT of Delhi) have evinced keen interest in
participating in RAMP.
Rs. 1500 Cr
75
Coir Vikas Yojana (CVY) is an Umbrella Scheme being implemented by Coir Board for
the Development of Coir Industry all over the Country. It was essentially created to help
in transfer of technology for development of skill of coir workers through technological
interventions and integration of various platforms.
Table 4.21: Coir Vikas Yojana Snapshot
16. Coir Vikas Yojana
Components
Technology Upgradation and Infrastructure: To modernize the coir industry by
providing advanced infrastructure
Skill Development: To provide training on sophisticated machinery/ advanced
technology
Marketing Assistance: To promote coir as an eco-friendly natural fibre and
showcase Indian coir products globally.
75 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 48
Quantum of Assistance
2025-26 (BE)
(in crores)
25% of the cost of admissible items of Plant and Machinery procured by
the Coir units. 100% of space rent/airfare, up to Rs. 1.00 lakh or actual rent
paid, whichever is lower. Market Development Assistance (MDA), is set at
10% of the average annual sales turnover of coir products.
Rs. 104.39 Cr.
76
Khadi Gramodyog Vikas Yojana consists of three grants, Khadi Vikas Yojana Grants for
marketing, interest, infrastructure for Khadi Products. Gramodyog Vikas Yojana Grants for
Village Industry sector and Khadi Grant to meet administrative needs.
Table 4.22: Khadi Gramodyog Vikas Yojana Snapshot
17. Khadi Gramodyog Vikas Yojana
Components
Infrastructure: Revival of khadi institutions
Skill Development: Training and Skill Development Programmes
Marketing Assistance: Subsidy on procurement of raw material
Quantum of Assistance2025-26 (BE) (in crores)
Subsidy @ 35% on Prime Cost for Cotton/Muslin, Wool and Polyvastra
and @ 20% on Prime Cost for Silk Khadi
Interest Subsidy - Khadi Institution pay only 4% interest rate. The
difference is borne by the Khadi and Village Industries Council (KVIC)
Financial Assistance for revival of khadi institution with ceiling limit
of Rs.15.00 lakh
Rs. 1065.77 Cr.
77
Launched on 17th November 2023, the PM Vishwakarma Scheme provides holistic support
to artisans and craftspeople, offering recognition, skill enhancement, tool incentives, credit
aid, digital transaction bonuses, and marketing assistance.
Table 4.23: PM Vishwakarma Snapshot
18. PM Vishwakarma
Components
Skill Development: Upgradation of skill of artisans
Credit Assistance: Easy access to collateral free credit
Marketing Assistance: To provide a platform for brand promotion and market
linkages to help them access new opportunities for growth.
76 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
77 Sourcehttps://www.indiabudget.gov.in/doc/eb/allsbe.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 49
Quantum of Assistance
2025-26 (BE)
(in crores)
Basic Training is of 40 hours, over 5-7 days,
Advanced Skill Training of 15 days/ 120 hours or more at designated
Training Centres.
A toolkit incentive of Rs. 15,000 after Skill Verification at the start of
Basic Training.
Loan assistance of Rs. 3,00,000/- wherein, the beneficiaries can avail
the first loan tranche up to Rs. 1,00,000/- and second loan tranche
up to Rs 2,00,000/.
Rs. 5100 Cr.
78
4.3. INSIGHTS FROM STAKEHOLDER CONSULTATIONS
These observations from the secondary research were discussed during stakeholder
consultation workshops to gain practical insights and refine the understanding. The aim
of conducting stakeholder workshops was to validate theoretical findings, gather practical
feedback, and refine the proposed convergence model based on real-world experiences
and challenges. The current shortcomings in the system and key factors that hinder
beneficiaries from effectively accessing the schemes were also discussed.
4.3.1. Need for Improved Awareness of Schemes
Government support is known to have a positive and important impact on the output of
MSMEs
79
, but most MSMEs are not aware of government support available for them. Even when
they are, they hardly avail it
80
. MSMEs in general face the challenge of gathering information
81
about all the schemes, policies, and programmes. Approximately 70% of MSMEs are aware
82
that a variety of government schemes exist, information about eligibility, application,
type of support under the schemes but their usage remains significantly low. For instance,
very few MSMEs avail the benefits of marketing schemes
83
, they are not aware of credit
schemes
84
and special financial privileges given by banks. Moreover, awareness of IPR
& Technology Centre Schemes is at lower level compared to other schemes of the
government and the number of MSMEs that availed scheme is minimal
85
.
78 Source: https://www.indiabudget.gov.in/doc/eb/allsbe.pdf
79 The Role of Government Cash Subsidy Assistance, Entrepreneurship Orientation and Product Innovation on
the Performance of MSMEs in Gelamjaya Village, Pasar Kemis, Tangerang Regency. Journal of Management,
102 - 108. VOL. 12 NO. 1 (2021) https://doi.org/10.35335/enrichment.v12i1.164
80 A STUDY ON MSME’S AWARENESS TOWARDS GOVERNMENT SUBSIDIES (2023)
81 Press Information Bureau 20 Jul 2023
82 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs
83 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs
84 A Report on Issues and Challenges in Financing MSME in Pune, Maharashtra
85 FTCCI Report: CURRENT PRACTICES AND CHALLENGES OF MSMEs Achieving Efqciencies in MSME Sector through Convergence of Schemes 50
Stakeholder consultations and literature review reveal three major barriers to
beneficiary mobilization under various schemes: duplication of schemes, limited
awareness among beneficiaries, and difficulties in accessing resources. These
barriers were further validated during FGDs, where 86% of stakeholders identified
scheme duplication as the most significant obstacle preventing effective participation.
60%
86%
70%
There are multiple schemes
offering similar support
Duplicity of Schemes
MSMEs do not know about
the availability of online portal
for availing the schemes
Hurdles in Access
MSMEs are not aware of all the
schemes benefitting them
Lack of Awareness
Figure 4.2: Barriers in scheme mobilization
The key players of the MSME ecosystem which includes Government Officials, Industry
Associations, Bankers and MSME themselves, are largely unaware of majority of the
schemes. In fact, online portals for accessing information on government schemes are
relatively unused. Schemes such as ZED, MSME Champions, and RAMP, are quite well-
known in industry circles, however, there is severe lack of know-how on how to apply or
navigate the process, rendering these schemes ineffective in practice. For instance, in a poll
of 39 associations at Hyderabad workshop, only one enterprise utilized the Procurement
and Marketing Scheme (PMS), despite many being eligible for it. While government efforts
are commendable, such as the introduction of the RAMP scheme, there are still significant
disconnects between policy design and implementation. Out of 18 schemes listed out, the
awareness regarding the schemes is only about 25%, i.e. 4-5 schemes. The most popular
schemes used by the MSMEs are PMEGP, PM Vishwakarma, MSME Champions and RAMP.
90% of stakeholders have not used any digital portal. 10% use NIVESH MITRA, NCD India
and GeM.
To tackle the issue of limited awareness about available schemes, solutions such as creation
of a centralized facilitation portal, creating an umbrella scheme and merging duplicate
schemes were considered. Creation of a centralised portal was proposed as the optimal
solution.
95% Achieving Efqciencies in MSME Sector through Convergence of Schemes 51
Stakeholder consultations and literature review reveal three major barriers to
beneficiary mobilization under various schemes: duplication of schemes, limited
awareness among beneficiaries, and difficulties in accessing resources. These
barriers were further validated during FGDs, where 86% of stakeholders identified
scheme duplication as the most significant obstacle preventing effective participation.
60%
86%
70%
There are multiple schemes
offering similar support
Duplicity of Schemes
MSMEs do not know about
the availability of online portal
for availing the schemes
Hurdles in Access
MSMEs are not aware of all the
schemes benefitting them
Lack of Awareness
Figure 4.2: Barriers in scheme mobilization
The key players of the MSME ecosystem which includes Government Officials, Industry
Associations, Bankers and MSME themselves, are largely unaware of majority of the
schemes. In fact, online portals for accessing information on government schemes are
relatively unused. Schemes such as ZED, MSME Champions, and RAMP, are quite well-
known in industry circles, however, there is severe lack of know-how on how to apply or
navigate the process, rendering these schemes ineffective in practice. For instance, in a poll
of 39 associations at Hyderabad workshop, only one enterprise utilized the Procurement
and Marketing Scheme (PMS), despite many being eligible for it. While government efforts
are commendable, such as the introduction of the RAMP scheme, there are still significant
disconnects between policy design and implementation. Out of 18 schemes listed out, the
awareness regarding the schemes is only about 25%, i.e. 4-5 schemes. The most popular
schemes used by the MSMEs are PMEGP, PM Vishwakarma, MSME Champions and RAMP.
90% of stakeholders have not used any digital portal. 10% use NIVESH MITRA, NCD India
and GeM.
To tackle the issue of limited awareness about available schemes, solutions such as creation
of a centralized facilitation portal, creating an umbrella scheme and merging duplicate
schemes were considered. Creation of a centralised portal was proposed as the optimal
solution.
95%
Creating a Common
Facilitation Portal
Create an Umbrella
Scheme
Merge Duplicate
Central Schemes
Enable Inter - ministerial
Collaboration
Merge Overlapping
Schemes of State and
Centre
95%
70%
60%
30%
20%
5.1.2. Opinion on convergence
1. Scheme of Fund for Regeneration of Traditional Industries ( SFURTI) and Micro &
Small Enterprises Cluster Development (MSE-CDP)
It was examined in the previous section how both schemes create common facility
centres and improve basic amenities with a fundamental goal of enhancing the
growth and sustainability of small and medium enterprises in India. Both the schemes
emphasize capacity building and skill development through soft interventions such
as training, workshops, and market promotion initiatives, which aim to empower
local artisans and entrepreneurs. Additionally, they support hard interventions by
facilitating the establishment of common facility centres, where businesses can access
shared resources like machinery and raw materials. In essence, SFURTI and MSE-
CDP complement each other in driving the overall advancement of micro and small
enterprises while nurturing the rich heritage of traditional crafts in India.
The theoretical assessment of schemes indicates comparable components. To
obtain a comprehensive understanding from a grassroots perspective, the identified
commonalities alongside the unique aspects of both schemes were presented to the
stakeholders to solicit their opinions regarding the possibility of merging the two
schemes. Stakeholder feedback reinforced the theoretical findings, with suggestions
that the overlapping objectives of these schemes could justify their convergence.
Notably, SFURTI is under consideration for discontinuation, which prompted discussions
on merging its components with MSE-CDP. This move could optimize resource
allocation and reduce duplicative efforts, ultimately enhancing the effectiveness of
cluster development initiatives while minimizing administrative waste. Achieving Efqciencies in MSME Sector through Convergence of Schemes 52
60
38
020406080
YES
NO
Opinion on convergence possibiltiy
of MSE-CDP and SFURTI?
Fig 4.3: MSE-CDP and SFURTI
2. Procurement and Marketing Support (PMS) and International Cooperation (IC)
The Procurement and Marketing Support (PMS) scheme and the International
Cooperation (IC) scheme, are similar, primarily in their objective of enhancing market
access for Micro and Small Enterprises (MSEs) and promoting their competitiveness.
PMS supports participation in domestic and international trade fairs, exhibitions, and
vendor development programs. Similarly, the IC scheme aids MSEs in participating
in international exhibitions and trade fairs, enhancing their visibility and potential for
export. The PMS encourages modernization through interventions such as adopting
e-commerce platforms and modern packaging techniques, while the IC scheme includes
initiatives like financial assistance for first-time exporters to cover costs associated
with registration and certification, thereby improving their readiness for international
markets. In summary, both schemes are designed to strengthen the capabilities of
MSEs, helping them to navigate market challenges and expand their reach, whether
domestically or internationally.
Stakeholders were consulted on whether the Procurement and Marketing Support
(PMS) scheme should be converged with the International Cooperation (IC) scheme.
It was highlighted that although similar, PMS scheme caters to both domestic and
international marketing support for MSMEs, and the IC scheme is limited to providing
assistance specifically for international marketing activities. A large portion of
stakeholders supported the idea of merging PMS into IC, recognizing the potential
for streamlined operations and better alignment of objectives. Many suggested
creating a dedicated marketing wing under the Ministry of MSME to ensure focused
support. This entity would oversee all marketing-related initiatives, both domestic and
international, ensuring focused support. The creation of this wing could also allow for
more specialized assistance in areas such as branding, export promotion, and market
access, without needing to merge the two schemes outright. Achieving Efqciencies in MSME Sector through Convergence of Schemes 53
3. A Scheme for Promotion Of Innovation, Rural Industries & Entrepreneurship (ASPIRE)
(Incubation Component) and MSME Innovative (Incubation Component)
ASPIRE and MSME Innovative scheme are two schemes implemented by MoMSME
that share several similarities, particularly in their focus on fostering entrepreneurship
and innovation. Both initiatives provide skill development opportunities. ASPIRE aims
to equip entrepreneurs with the necessary skills to launch and sustain their businesses
. The MSME Innovative scheme also focuses on skill enhancement, ensuring that
entrepreneurs have access to training that can help them innovate and grow. ASPIRE
provides financial and technical support for business incubation, while MSME Innovative
similarly offers resources to promote business development, particularly for start-ups
and innovative enterprises. Both schemes aim to create an ecosystem where new
businesses can thrive through mentorship and guidance. ASPIRE promotes the use
of technology in enhancing agricultural practices and fostering innovation. The MSME
Innovative scheme also emphasizes technological advancement as a crucial component
for the growth of MSMEs, encouraging the adoption of innovative technologies to
improve competitiveness. These shared objectives indicate a concerted effort by
the government to strengthen incubation facilities for the MSME sector, particularly
in rural and underserved areas, through innovation and skills development. However,
there are opportunities for convergence between the ASPIRE and MSME Innovative
schemes that could enhance their overall effectiveness.
To facilitate a discussion, the similarities of both the schemes to stakeholders were
presented. Although many stakeholders were unfamiliar with the ASPIRE initiative,
they recognized the similarities between the two schemes.
Both the MSME Innovative (Incubation) scheme under MSME Champions and
the ASPIRE scheme share a common objective of promoting innovation and
entrepreneurship through business incubators, utilizing similar support mechanisms.
Based on the stakeholder consultation, the potential for convergence was explored.
While stakeholders identified challenges, such as ASPIRE being a niche scheme
specifically for agro-rural enterprises, they believe convergence is possible and
beneficial. The below mentioned four possible convergence options were discussed
with stakeholders: Achieving Efqciencies in MSME Sector through Convergence of Schemes 54
66%
18%
11%
5%
0%
20%
40%
60%
80%
Opinion on ASPIRE (Incubation Component) and
MSME Innovative (Incubation Component)
Create a Special
Agro-Rural
Category within
MSMEInnovative
Establish a
UnifiedIncubation
Framework
Launch a Joint
Fund for
Agro-Rural
Enterprises
Create a Shared
Governance
Structure
Figure 4.4: Opinion on ASPIRE (Incubation Component) and MSME Innovative
(Incubation Component)
Integrating ASPIRE as a special component under MSME Innovative was viewed as
the most feasible option. This approach, where ASPIRE could have a dedicated budget
allocation within the MSME Innovative framework, was seen as the most efficient
way to ensure that agro-rural incubators continue to receive targeted support while
benefiting from the broader reach and resources of MSME Innovative. This solution
addresses the need for specific support mechanisms for agro-rural enterprises while
streamlining efforts under a unified scheme.
The need for convergence between ASPIRE and the MSME Innovative (Incubation
Component) arises from the overlapping objectives of both schemes in fostering
entrepreneurship, skill development, and technological innovation. This convergence
will lead to better synergy between policy interventions, reducing administrative
complexities and enabling holistic support for enterprises at different stages of
innovation and business development. MSME Innovative’s extensive network may be
leveraged while retaining ASPIRE’s focus on rural enterprises. This alignment will also
facilitate knowledge-sharing, mentorship, and capacity-building initiatives, strengthening
the entrepreneurial ecosystem across sectors. Additionally, pooling resources from
both schemes can lead to the creation of joint funds for technology adoption, market
expansion, and export promotion, further boosting MSME competitiveness.
4. Skill Development Initiatives
It is found in literature that absence of a coordinated approach to skill development
86
hinders the growth of MSMEs. Problems like absenteeism, high wage rates, work 86 Naveen Negi, Arvind Mohan, Musliadi Bin Usman, Almighty C. Tabuena. (2023). Challenges of Skill
Development of Workers in MSME Sector: An Empirical Study of Training Organisations. European
Economic Letters (EEL), 13(3), 89–94. https://doi.org/10.52783/eel.v13i3.214 Achieving Efqciencies in MSME Sector through Convergence of Schemes 55
stoppages, training costs, and unionisation are persistent across all sectors of MSMEs
87
.
The technical skills gap is particularly concerning, with a 40%
88
deficit between the
skills produced by education systems and those required by the industry. With respect
to government initiatives aimed at skill development and entrepreneurship, one of the
major challenges that arises is the significant overlap among various schemes. While
these programs are designed to foster employment, entrepreneurship, and capacity
building, the duplication of efforts across ministries leads to inefficiencies in resource
allocation, confusion among beneficiaries, and fragmented implementation. For instance,
many schemes with similar goals of promoting self-employment and entrepreneurship
exist under different ministries. For instance, PMEGP is similar to the Start-up India
initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), as
both focus on encouraging entrepreneurship and creating jobs. The schemes target
similar beneficiaries (youth and unemployed) with a similar objective. Similarly, for
entrepreneurial training there is Entrepreneurship and Skill Development Programme
(ESDP) and also Pradhan Mantri Kaushal Vikas Yojana (PMKVY) by the Ministry of Skill
Development and Entrepreneurship (MSDE)
89
and Deen Dayal Upadhyaya Grameen
Kaushalya Yojana (DDU-GKY) by the Ministry of Rural Development (MoRD)
90
, all these
schemes aim to skill and train people, including rural youth, for self-employment or
wage employment.
Analysis of qualitative data from stakeholder workshops reveal that majority of the
workforce is unskilled or low-skilled with little to no knowledge of factory operations.
Another major concern is that skilled youth are moving out of the country, either
to seek better employment opportunities or higher wages. This migration of talent
exemplifies the phenomenon of brain drain, where the emigration of highly educated
or skilled individuals can lead to a significant loss of human capital for the home
country. Although there are programs like PMEGP, ATI, ESDP that are catering to skill
development, the MSMEs are not able to take full benefit of these schemes due to:
Too many different portals,
Lack of digital access
Unawareness about how and where to apply.
For MSMEs to be able to utilize schemes like ESDP and PMEGP properly, they need all
the skill related schemes in a single portal.
87 Adhinarayan, B. (2014). An evaluation of the problems and prospects of small-scale entrepreneurship in an emerging economy: A study of selected industries in Tamil Nadu districts [PhD Thesis]. Anna University.
88 Source: World Bank’s Ease of Doing Business Report (2023), Indicators and Research Articles
89 Schemes & Initiatives - https://www.msde.gov.in/en/schemes-initiatives
90 DDUGKY - http://ddugky.info/ Achieving Efqciencies in MSME Sector through Convergence of Schemes 56
0510 15 20 25
Digital Literacy and Technology Integration
Lean Management and Process Optimization
Compliance and Regulatory
Export and Trade
Entrepreneurial and Management Training
Technical Skill Upgradation
Skill Support required by MSMEs
Figure 4.5: Skill support required by MSMEs
Enterprises need training in areas of entrepreneurial training, technical skills, trade-related
skills, regulatory compliance and digital literacy.
Proposed ways for convergence of skill development initiatives:
1
Unified Skill Development Scheme for MSMEs: A single scheme that consolidates various
skill initiatives to reduce fragmentation and improve accessibility.
2
National Council for MSME Skill Development: A dedicated body to oversee and
coordinate skill development efforts across different sectors.
3
Integrated Digital Platform for MSME Skill Development Programs: A single online portal
that brings all skill-related programs together, making it easier for MSMEs to access and
apply.
4
Sector-Specific Training Programmes with Industry-Academia Linkages: Customized
training programs tailored to the specific needs of different industries, designed in
collaboration with academic institutions and industry experts.
In summary, feedback from stakeholders complements the research findings
and stresses on the importance of aligning the MoMSME initiatives, revealing a
strong consensus on the need for integration. In the next chapter, the specific
recommendations for the convergence of these schemes are outlined, drawing on
the insights gathered throughout this research to propose actionable strategies
that can improve collaboration and impact within the MSME sector. 05
RECOMMENDATIONS
FOR CONVERGENCE
AND WAY FORWARD Achieving Efqciencies in MSME Sector through Convergence of Schemes 58
The recommendations are designed to streamline information access, harmonize
processes, and address broader issues through a two-pronged approach:
Information Convergence, Process Convergence. Each component aims to simplify
the operational landscape for MSMEs, reduce redundancies, and enable a more
supportive ecosystem for growth. Implementing these strategies can help create
an integrated support framework that enhances efficiency, improves accessibility,
and empowers MSMEs to capitalize on available opportunities.
INFORMATION CONVERGENCE
RECOMMENDATION 1: CENTRALIZED PORTAL FOR MSMES:
Currently, MSMEs face challenges in accessing relevant information on government
schemes, compliance requirements, and financial assistance due to the dispersed nature
of existing platforms such as My MSME, NSWS, My Scheme, and the Udyam Registration
Portal. The fragmented information infrastructure may lead to inefficiencies, increased
administrative burdens, and potential information gaps. Even, searching for “schemes for
MSME” on Google, yields scattered results, lacking a cohesive representation of available
resources.
Research indicates that fragmented information infrastructure increases the cost of
compliance and hampers the ability of MSMEs to fully leverage government schemes
91
.
Additionally, the absence of a unified portal limits MSMEs’ growth potential, as many are
unaware of beneficial schemes or compliance regulations.
91 Understanding Indian MSME Sector (May 2025) https://www.sidbi.in/uploads/Understanding_Indian_MSME_ sector_Progress_and_Challenges_13_05_25_Final.pdf#:~:text=However%2C%20MSMEs%20need%20to%20 focus%20on%20enhancing,digital%20adoption%2C%20skilling%2C%20labour%20availability%20and%20 infrastructure.&text=Despite%20its%20crucial%20role%2C%20the%20MSME%20sector,Inadequate%20 infrastructure%20and%20technology%20adoption%2C%20hindering%20productivity. Achieving Efqciencies in MSME Sector through Convergence of Schemes 59
The Udyam Registration Portal has API integration with more than 44 portals. On the
my.msme.gov.in portal, detailed information on schemes, compliance requirements, etc.,
is available. However, there is still immense scope for streamlining the online platforms.
Therefore, the Ministry of MSME is working on a Portal of Portals, by which the information
convergence will be further streamlined and made available for all stakeholders.
Proposed Centralized Portal for MSMEs:
Although the Ministry of MSME is developing a “Portal of Portals” to further streamline
information convergence and enhance accessibility for all stakeholders, it is suggested
that the portal may include the following modules to provide comprehensive support for
MSMEs, in line with some of the best practices such as Canada’s BizPal or Singapore’s
GoBusiness.
Module 1 - Basic Information Module
This module serves as a repository of four fundamental information for MSMEs, including:
Scheme Information: Details
about all central (MoMSME
and Other Ministries) and state
government schemes, including
eligibility criteria and benefits.
Compliance Requirements: Pre-
filled data from Income Tax and
GST. Guidance on regulatory and
tax compliance.
Financial Assistance:
Information on loan schemes,
grants, and subsidies from
various government and private
institutions.
Generative AI Model: A Large
Language Model (LLM) will allow
the MEs to probe and seek
guidance related to available
schemes and their eligibility.
Module 2 - Process Module
This module handles the procedural aspects of applying for schemes, tracking applications, and interacting with various authorities. MSMEs can monitor the progress of their applications through a dashboard that shows where the application is in the process - filing, verification, approval, or disbursal. Achieving Efqciencies in MSME Sector through Convergence of Schemes 60
BankIntegraon :
Theplaorm willlink
with partnerbanks
forloan processing,
disbursaloffunds,
and trackingof
repaymentschedules.
B
T
re
Approval
Process
:
Onceverified,the
applicaonwill
proceedtothe
approvingauthority,
whichcan allocate
resources,grants,or
loans.
a
r
faocgbTrmhby
ulymocras
:
Roungapplicaons
totherelevant
authories for
verificaon.
?
requestclarificaon
fordocuments.
R
r
wwncbTrmh
Filing
:
MSMEscan file
schemeapplicaons
directlythrough the
portal with a simple
step-by-stepguide.
Module 3 - Compliance Module
This module may be designed to simplify and support MSMEs in fulfilling regulatory and
statutory requirements, minimizing risks of penalties or de-registration. It will serve as a
virtual compliance officer offering MSMEs structured, real-time, and customized guidance
on staying compliant with various laws and rules.
Document Repository: The module shall host a secure document repository where MSMEs
can upload and manage all important compliance-related documents, such as GST filings,
income tax returns, environmental clearances, audit reports, and employee welfare filings.
By integrating with government systems like DigiLocker, PAN, and GSTN, the portal
can also enable automatic fetching and validation of compliance documents to avoid
duplication and reduce manual errors.
Tracking and Alerts: To support timely compliance, the module shall feature an automated
compliance calendar that tracks enterprise-specific deadlines across domains like tax,
labour, environment, and sector-specific regulations. MSMEs will receive personalized alerts
and reminders via SMS, email, and in-portal notifications for upcoming filings, license
renewals, or audit submissions.
Guided Compliance Assistance: Guided assistance through step-by-step digital walkthroughs
may be offered that explain how to complete common compliance tasks, such as filing
GST returns, renewing licenses, or fulfilling annual reporting requirements. An AI-enabled
chatbot, trained on a large language model, can be embedded in the portal to offer real-
time, multilingual support for answering compliance-related queries.
Module 4 - Market Research Module
This module will provide data-driven insights for MSMEs, helping them to:
Identify Growth Opportunities: Leveraging generative AI technologies, the module
shall provide detailed market analysis customized to the nature, size, and sector of the
enterprise. This analysis will include real-time trends, emerging demand hotspots, and
consumer preferences. The module may also tap into enterprise-level databases to offer
benchmarking insights, enabling MSMEs to evaluate their performance in comparison to
peers, identify market gaps, and refine their competitive strategies.
Access Financial Resources: The module shall offer structured and searchable information
on a wide range of financing instruments, including traditional bank loans, working capital
finance, venture capital funding, angel investment networks, and government-sponsored
grants or subsidy programs. The portal will help users discover financing opportunities
based on their eligibility, credit profile, and sectoral alignment. Achieving Efqciencies in MSME Sector through Convergence of Schemes 61
Explore Export Potential: For MSMEs interested in exploring international markets,
the module shall provide guidance on entering new markets, including sector-specific
regulations and logistics.
Technological Integration
AI-Driven Personalization: The portal will use AI algorithms to analyse the business
profile of each MSME and provide tailored scheme recommendations.
Chatbot for Real-Time Assistance: An AI chatbot will offer step-by-step guidance
on navigating compliance procedures, applying for schemes, and availing financial
support.
Mobile App Integration: The platform will include a mobile application to provide
MEs with seamless access to information and real-time notifications.
Comparison of Existing Platforms
Presently the MSMEs have access to the portals namely, My MSME, NSWS, My Scheme
and Udyam Reg. Portal.
Table 5.1 highlights gaps in the current platforms and the advantages the proposed
centralized portal will offer:
Table 5.1 – Comparison between proposed portal and existing portals of MSMEs
Particulars
Proposed
Portal
My
MSME
NSWS
My
Scheme
Udyam
Registration
Portal
Schemes availability (Central,
State & Other Ministry)
Yes Yes Yes Yes Yes
Online forms for direct filing and
applying of schemes
Yes PartiallyPartially No No
e-filing - DSC or Aadhar OTP Yes Yes Yes No Yes
Online Tracking Mechanism Yes Yes Yes No No
Approving authority access Yes Yes Yes No Yes
Helpline 24x7Yes Yes Yes No No
Artificial Intelligence Enabled Yes No No No No
Chat-BotYes No No No No
Mobile ApplicationYes Yes Yes No No
Connected to Udyam Server for
pre-filled data
Yes No No No Yes Achieving Efqciencies in MSME Sector through Convergence of Schemes 62
Comparison of Proposed Portal vs. Best Practices
The table below compares the proposed portal with some of the best practices.
Table 5.2 – Comparison between proposed portal and best practices
Feature
Proposed
Portal
BizPaL
(Canada)
GoBusiness
(Singapore)
TS-iPASS
(Telangana,
India)
Germany’s
Einheitlicher
Ansprechpart-
ner
Business
Registration
Service
(Australia)
Cross-
Government
Integration
Yes -
Central,
State, and
Ministry
Yes -
Federal,
Provincial,
Municipal
Yes - Over
20
Government
Agencies
Yes -
Multiple
State
Agencies
Yes - State
and Local
Authorities
Yes -
Federal and
State
Authorities
Personalized
Recommenda-
tions
Yes -
Based on
business
profile
Yes -
Based on
business
type and
location
Yes -
AI-Driven
based on
business
needs
No
Yes - Based
on Business
Requirements
Yes - Based
on Business
Activities
Real-Time
Updates &
Compliance
Yes -
Regulato-
ry updates
and track-
ing
No -
Focus on
permits
and
licenses
Yes -
Compliance
reminders
and
updates
Yes - Track
applications
and
approvals
Yes - Real-
Time
Application
Tracking
Yes -
Updates on
Registration
Status
AI-Enabled
Chatbot for
Assistance
Yes - 24/7
Support
No
Yes - Per-
sonalized
Assistance
via AI
No NoNo
Mobile App
Integration
Yes No No Yes NoYes
Online Track-
ing of
Application
Status
Yes -
Track
applica-
tions and
approvals
Yes -
Track
permits
and
licenses
Yes - Track
licenses and
schemes
Yes - Track
approvals
and status
updates
Yes - Track
Status of
Permits and
Licenses
Yes - Track
Registration
Status
Based on the comparison of best practices, the proposed portal integrates features from
BizPaL, TS-iPASS, Einheitlicher Ansprechpartner, and Australia’s Business Registration
Service while enhancing personalization through AI-driven recommendations and real-
time updates. It will also provide 24/7 support via a chatbot. Furthermore, the proposed
portal broadens its scope by incorporating cross-government integration at the central,
state, and ministry levels, making it more comprehensive than the approaches adopted
by the other portals, which are often limited to specific administrative levels or services. Achieving Efqciencies in MSME Sector through Convergence of Schemes 63
Building the Portal:
To ensure robust design, technical efficiency, and policy alignment, the following institutions
are proposed to play key roles in the development and management of the portal.
Relevant technology development
institutions / Advanced computing
agencies / Specialized IT research
bodies
To provide technical expertise in the development of
advanced IT solutions, including artificial intelligence,
data analytics, and management systems essential
for the portal’s functionality.
Government IT infrastructure agencies
/ Digital governance bodies / Public
sector technology service providers
To support the development of secure, scalable,
and interoperable government applications, ensuring
seamless integration with existing digital platforms of
ministries and departments.
Government agencies responsible for
MSME development
To serve as the Nodal Agency responsible for
coordination, oversight, and ensuring alignment of
the portal with the broader objectives of MSME
policy and service delivery.
PROCESS CONVERGENCE
RECOMMENDATION 2: MICRO AND SMALL ENTERPRISES -
CLUSTER DEVELOPMENT PROGRAMME (MSE-CDP) AND SCHEME
OF FUND FOR REGENERATION OF TRADITIONAL INDUSTRIES
(SFURTI)
Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is implemented
by different agencies, including NGOs, institutions of central and state governments,
and Panchayati Raj Institutions (PRIs), whereas the O/o DC-MSME oversees ‘Micro and
Small Enterprises - Cluster Development Programme’ (MSE-CDP). The stakeholders and
implementation frameworks are different, and therefore, it may be challenging to converge
the two schemes. However, the suggestion for the merger of SFURTI with the MSE-CDP
stems from the overlap in key components of both schemes, such as cluster development
through hard and soft interventions. While MSE-CDP focuses on enhancing infrastructure
and competitiveness for MSE clusters, SFURTI also supports micro and small enterprises
but has a narrower focus of penetrating uncovered and aspirational districts, promoting
traditional industries, and preserving endangered crafts and arts.
Given SFURTI’s smaller budget and narrower scope, integrating its components within
MSE-CDP would enhance resource efficiency and program reach. The merger would ensure
a special focus on traditional industries within the broader MSE-CDP framework, allowing
for better coordination, greater financial backing, and more comprehensive support for
cluster development while preserving SFURTI’s original objective of supporting traditional
and endangered industries. This approach would enable a more unified and impactful
mechanism for supporting MSEs across various sectors, including those with unique
cultural and economic significance. Achieving Efqciencies in MSME Sector through Convergence of Schemes 64
Table 5.3 – Comparison between MSE-CDP and SFRUTI
AspectMSE-CDP SFURTI
Objective
To enhance the competitiveness,
productivity, and sustainability of micro
and small enterprises by developing
clusters with shared infrastructure and
resources.
To revitalize and strengthen
traditional industries and
artisan-based clusters, ensuring
sustainable employment and
improving product quality.
Target
Audience
Micro and Small Enterprises (MSEs)
operating in clusters across various
industries, including manufacturing,
food processing, and handicrafts.
Traditional artisans and industries
involved in coir, khadi, handicrafts,
bamboo, honey, and other rural
trades.
Support
Mechanism
Provides financial support for setting
up Common Facility Centers (CFCs),
infrastructure development, and
cluster-based interventions.
Offers grants for capacity building,
infrastructure development,
market promotion, and technology
upgradation for traditional
industries.
Skill
Development
Facilitates skill development through
workshops, training programs, and
technology transfer initiatives for MSEs.
Focuses on artisan training,
skill enhancement, and product
diversification to improve
marketability and productivity.
Access to
Finance
Provides funding support with grants
up to 70-90% of project costs for
infrastructure and shared facilities.
Grants up to 90% of the project
cost, with financial assistance
from the Ministry of MSME and
implementing agencies.
Technology
Integration
Supports technology adoption,
automation, and the establishment
of common production facilities with
advanced machinery.
Encourages the use of modern
tools and sustainable production
techniques to enhance traditional
craftsmanship.
Government
Support
Implemented by the Ministry of MSME,
with financial support and technical
guidance provided to industry clusters.
Implemented by the Ministry of
MSME through nodal agencies
like KVIC, Coir Board, and other
industry bodies.
Convergence Framework:
Special Category
for Traditional
Industries within
MSE-CDP
01
Unified
Governance
Structure
02
Consolidated
Funding
03
Monitoring and
Evaluation
04 Achieving Efqciencies in MSME Sector through Convergence of Schemes 65
A structured convergence mechanism for merging SFURTI with MSE-CDP shall be designed
to ensure effective resource utilization and retention of the unique focus on traditional
industries.
1. Special Category for Traditional Industries within MSE-CDP (Sub-scheme Creation)
A dedicated sub-scheme can be established within MSE-CDP to specifically address
traditional industries, preserving the focus on crafts, arts, and endangered industries
that SFURTI supports. As per SFURTI’s original goal, the emphasis on clusters in
uncovered and aspirational districts may be continued, while also integrating these
into MSE-CDP’s larger cluster development strategy.
2. Unified Governance Structure
Relevant support institutions for MSMEs can be the nodal agency for the overall
administration of the merged program but regional agencies such as NGOs, PRIs, and
institutions may be involved with SFURTI to act as implementation partners, particularly
in traditional industry-focused clusters. The local institutions should be empowered to
retain their role in traditional industry clusters under the special category, leveraging
their expertise and local networks, while MSE-CDP oversees broader industrial cluster
development.
3. Consolidated Funding
The budgets of SFURTI and MSE-CDP can be combined to form a larger pool of
funds for cluster development, while earmarking a specific percentage for traditional
industries. This ensures focused investment in sectors that need special attention
without diluting the financial strength of the overall program. Flexibility should be
provided in allocating resources to uncovered or aspirational districts, depending on
the requirements of each sector, allowing greater responsiveness to local needs.
4. Monitoring and Evaluation
A comprehensive monitoring and evaluation system should be developed that tracks
both the performance of traditional industries under the special category and the
broader impact of the MSE-CDP. This will help assess the effectiveness of interventions
across different types of clusters. The cluster-level beneficiaries can be tracked using
digital tools for feedback on outcome-based KPIs such as infrastructure use, market
performance, and skill enhancement.
Implementation Framework
This framework outlines the key steps, roles, and processes for the successful convergence
of SFURTI and MSE-CDP. It streamlines resources, optimizes cluster development, and
maintains the focus on traditional industries. The framework ensures a phased and strategic
integration while preserving each scheme’s unique objectives. The Ministry of MSME, along
with its state-level counterparts, designated nodal agencies, and implementing partners
such as NGOs and PRIs, may collaboratively lead this process across the following four
core components: Achieving Efqciencies in MSME Sector through Convergence of Schemes 66
1. Strategic Planning and Program Realignment
A detailed review of the existing components of SFURTI and MSE-CDP can be
conducted, focusing on budget allocations, the scope of interventions (both hard and
soft), and geographic focus. Based on this review, both programs can be aligned under
a single strategic framework, designating MSE-CDP as the umbrella program for all
cluster development initiatives within the MSME sector. Within this unified structure, a
special category for traditional industries can be created under MSE-CDP, incorporating
the objectives and focus areas of SFURTI. The combined budget of both schemes can
be reallocated, ensuring that a portion (15–20%) of the total budget is earmarked
specifically for the development of traditional industries, particularly in uncovered and
aspirational districts.
2. Institutional Coordination and Governance Mechanism
It is proposed that the existing governance structure of MSE-CDP continue to oversee
the integrated program, thereby ensuring consistency in cluster development efforts
across all sectors. Nodal agencies currently engaged in implementing SFURTI—such as
NGOs, Panchayati Raj Institutions (PRIs), and institutions from both central and state
governments—may operate under the MSE-CDP framework for the specific purpose
of supporting traditional industry clusters. These agencies are expected to retain
their existing roles and domain expertise while aligning their efforts with the broader
objectives of the unified cluster development strategy. Additionally, the formation of
state- and district-level advisory boards is proposed, comprising representatives from
the Ministry of MSME, NGOs, industry experts, and associations of traditional crafts
and artisans, to provide localized input and guide cluster development priorities at
the regional level.
3. Program Implementation and Cluster Identification
It is recommended to conduct a joint mapping exercise to identify existing clusters
under both SFURTI and MSE-CDP, as well as to map new clusters in districts that align
with the objectives of both schemes. Based on this exercise, clusters can be categorized
into two distinct groups to enable the development of tailored interventions. The
first category can be termed “General MSE Clusters,” which refers to standard MSE
clusters typically targeted under MSE-CDP. The second category can be defined as
“Traditional Industries Clusters,” focusing on areas previously covered under SFURTI,
such as traditional crafts and arts. This categorization will help streamline program
implementation and ensure that interventions are designed according to the unique
needs of each cluster type.
4. Monitoring and Evaluation Framework
A unified M&E framework to integrate progress tracking for both traditional industry
clusters and general MSE clusters will be useful. This framework should include clearly
defined Key Performance Indicators (KPIs) for each category, covering aspects such
as cluster growth, technology adoption, and improvements in artisan livelihoods. Bi- Achieving Efqciencies in MSME Sector through Convergence of Schemes 67
annual performance reviews could be conducted for both types of clusters to ensure
effective implementation. For traditional industries, the focus should be on ensuring
adequate support for market linkages and the preservation of cultural crafts, while
for MSE clusters, the emphasis should remain on enhancing competitiveness and
fostering innovation. Additionally, feedback mechanisms involving advisory boards and
implementing agencies should be put in place to continuously refine and improve
interventions based on real-time data and ground-level insights.
5. Timeline
02 46 81 0
Months
12 14 16 18
Phase IV
(Annual)
Phase III
(10-15 months)
Phase II
(5-10 months)
Phase I
(0-5 months)
Strategie Planning and
Program Realignment
Institutional Coordination
and Governance Mechanism
Program Implementation and
Cluster Identification
Monitoring and
Evaluation
IMPLEMENTATION TIMELINE
Benefits
The following benefits may emerge from the suggested convergence model:
Improved
Infrastructure
2
Better Capacity
Building
3
Enhanced
Technological
Upgrades
4
EnhancedMarket
Linkages
1 Achieving Efqciencies in MSME Sector through Convergence of Schemes 68
The merger of SFURTI with MSE-CDP shall create a streamlined and efficient support
system for MSME clusters, optimizing resources and eliminating redundancy. It ensures
that traditional industries, especially in uncovered and aspirational districts, receive focused
attention through specialized interventions while benefiting from the broader infrastructure
and market development initiatives of MSE-CDP. By leveraging SFURTI’s grassroots
expertise and MSE-CDP’s robust cluster development framework, this convergence
promotes cohesive growth, preserving cultural heritage while boosting the competitiveness
of both traditional and modern MSMEs. This unified approach enhances geographic reach,
fosters public-private partnerships, and drives sustainable economic growth, ensuring
balanced development across sectors.
Challenges
Coordination and Alignment of Objectives: MSE-CDP and SFURTI, while both aimed at
boosting MSMEs, have distinct objectives. MSE-CDP focuses on infrastructure development,
while SFURTI is more aligned with traditional industries and artisan-based clusters. Aligning
these distinct goals is a legitimate challenge, and misalignment could lead to fragmented
efforts and delays in meeting both objectives simultaneously.
Complex Governance Structure: One of the challenges in scheme convergence is that
SFURTI is implemented by multiple agencies, including NGOs, institutions of central and
state governments, and Panchayati Raj Institutions (PRIs), whereas the O/o DC-MSME
oversees MSE-CDP. The involvement of different stakeholders and varying implementation
frameworks makes it difficult to align and integrate these two schemes effectively. With
multiple stakeholders involved coordination becomes complex.
Financial Resource Allocation and Management: Allocating financial resources would
require careful planning to avoid resource mismanagement or disproportionate funding
to certain clusters. Inadequate or uneven distribution of funds could result in some clusters
receiving insufficient financial support, while others might be overfunded, leading to
disparities in development.
Varied Levels of Cluster Readiness: Some clusters may be better equipped to absorb and
utilize infrastructure or skill development assistance, while others may require significant
groundwork before being eligible for the convergence benefits. This could lead to slower
development in regions where traditional industries lack basic infrastructure, further
widening the gap between advanced clusters and underdeveloped ones. Ensuring readiness
across diverse clusters will be time-intensive and may slow down the convergence process.
Resistance to Change in Traditional Industries: Traditional industries, particularly artisans,
may be resistant to modern technologies or new production techniques introduced under
the MSE-CDP scheme. There may also be concerns about losing cultural identity or
traditional craftsmanship. Resistance to adopting modern methods could undermine the
productivity and competitiveness gains that the convergence aims to achieve, especially
in clusters where preserving cultural heritage is crucial.
Capacity Gaps in Implementation Agencies: The implementing agencies might not have
sufficient capacity, in terms of manpower and expertise, to handle the simultaneous rollout
of both schemes. Capacity limitations could lead to delays, poor quality of services, or
mismanagement, which would dilute the overall impact of the convergence. Achieving Efqciencies in MSME Sector through Convergence of Schemes 69
RECOMMENDATION 3: CONVERGE SKILL DEVELOPMENT
PROGRAMMES
The skills ecosystem in India’s MSME sector plays a crucial role in improving productivity,
enhancing competitiveness, and driving sectoral growth. As the backbone of the Indian
economy, MSMEs contribute significantly to employment generation and economic
development. However, the sector continues to face challenges in bridging the skill
gap, primarily due to evolving technological demands and the diverse needs of various
industries. A robust and responsive skills ecosystem is essential for equipping the MSME
workforce with industry-relevant competencies, fostering entrepreneurship, and ensuring
long-term, sustainable economic growth.
Building such an ecosystem requires a coordinated and comprehensive approach involving
key stakeholders, including government bodies, industry partners, training institutions, and
financial organizations. Together, these actors can develop a dynamic skill development
framework tailored to the unique needs of MSMEs.
To better understand the skill requirements of the sector, an analysis was conducted,
and a comprehensive mapping of existing schemes addressing these needs is presented
below. This mapping highlights how various programs respond to specific competency
gaps within the MSME sector. Identifying these linkages also allows for the recognition of
overlaps, gaps, and opportunities for strategic convergence within the current framework.
Table 5.4: Skill required for MSMEs
Required SkillRelated MSME SchemesDescription
Entrepreneurial
and Management
Training
Entrepreneurship and Skill
Development Programme
(ESDP)
Prime Minister Employment
Generation Programme
(PMEGP)
Training in business planning,
financial management, marketing,
and entrepreneurship development.
Training in leadership, communication,
negotiation, customer service, and team
management.
Technical Skill
Upgradation
Tool Rooms and Technical
Institutions
Industry-specific technical skills,
technology adoption, product quality,
and skill enhancement.
Digital Literacy
and Technology
Integration
Digital MSME
Training on digital tools like ERP, CRM,
e-commerce, digital marketing, and
cybersecurity.
Lean Management
and Process
Optimization
MSME-Competitive (Lean)
Training on lean practices, process
optimization, supply chain, and inventory
management.
Compliance and
Regulatory
ZED (Zero Defect Zero
Effect) Certification
Scheme,
National SC/ST Hub
Training on quality standards, regulatory
compliance, sustainability practices, and
statutory requirements. Achieving Efqciencies in MSME Sector through Convergence of Schemes 70
Export and Trade
International Cooperation
Scheme,
ESDP
Training on export procedures,
international trade regulations,
documentation, and market access.
Innovation and
Incubation Support
Technology Centres and
Incubation Centres,
ASPIRE
Training on product innovation, design
thinking, prototyping, incubation, and
startup support.
Several initiatives are actively addressing the need for targeted skill development across the
MSME sector, which includes a diverse range of enterprises, including informal and micro
units. While there may be potential for convergence in specific areas of skill development,
a complete merger of schemes may not be practical due to differences in target
beneficiaries, sectoral focus, and the technical nature of training content. Nevertheless,
the Ministry of MSME is already collaborating with the Ministry of Skill Development and
Entrepreneurship (MSDE) and other stakeholders, such as GeM and SIDBI, to identify and
implement areas of alignment wherever feasible. Based on a thorough review of existing
schemes, a detailed mapping of skill requirements, and consultations with key stakeholders,
the recommendations for convergence and potential merger have been formulated. These
approaches are aligned with the profile of beneficiaries and the specific nature of training
required, and are discussed below.
Convergence framework
The following merger and convergence approaches can be adopted based on the
beneficiaries and the type of training required:
Entrepreneurship and Business Skills Development Program
I
MSME Technical Skill Development Program
II
Training program for Rural and Women Artisans
III
i. Entrepreneurship and Business Skills Development Program:
It is recommended to merge the skill component of Prime Minister Employment
Generation Programme (PMEGP), International Cooperation (IC), and Procurement and
Marketing Scheme (PMS) under Entrepreneurship and Skill Development Programme
(ESDP) to provide entrepreneurial skills, financial literacy, market access, export, and
credit access training. Achieving Efqciencies in MSME Sector through Convergence of Schemes 71
While the full merger of PMEGP may be challenging due to its status as a flagship scheme,
aligning its certification and training components with ESDP can help reduce duplication,
optimize resources, and improve efficiency.
ii. MSME Technical Skill Development Program:
A unified implementation approach is recommended to improve coordination among
the capacity-building components of Tool Rooms, Technical Institutions, MSME Lean
Scheme, MSME Digital, Technology Centres, and other affiliated training institutions.
The focus should be on industry-specific technical skills, lean manufacturing practices,
and adoption of advanced technologies.
Joint Implementation Committee
Shared Resource Utilization
Unified Training Calendar
Cross - Scheme Trainer Pools
Industry Collaboration
Taskforce
Representatives
from the Tool
Rooms, MSME
Champions,
Incubation centres,
Training institutions,
Academia and
Technology Centres.
Coordinate activities
to ensure alignment
in curriculum design,
scheduling, and
capacity-building.
Shared usage of
training
infrastructure, such
as machinery,
equipment, and
technology labs,
among the Tool
Rooms, Technology
Centres, and other
related schemes.
Ensures that
existing resources
are optimally
utilized without
duplicating efforts.
Align
capacity-building
sessions, skill
development
training, and lean
manufacturing
workshops.
This will help
avoid scheduling
conflicts and
provide a more
efficient allocation
of resources.
Create a pool of
expert trainers
from Tool
Rooms, Training
institutions, and
Technology
Centres that can
be shared across
all training
initiatives
To design
industry-specific
curricula and
offer
apprenticeships
across training
initiatives.
This will foster a
more integrated
and practical
approach to skill
development. Achieving Efqciencies in MSME Sector through Convergence of Schemes 72
iii. Establish a Coordination Mechanism for Technical Skill Development
Given the diversity of technical training across MSME schemes, a full merger may not be
practical. Instead, a coordination mechanism is proposed through a Joint Implementation
Committee comprising representatives from Tool Rooms, training institutions, Technology
Centres, and incubation hubs. This committee would align curricula, schedules, and
capacity-building efforts. Shared infrastructure use, a Unified Training Calendar, and
Cross-Scheme Trainer Pools would help optimize resources and avoid duplication. An
Industry Collaboration Taskforce would support the design of sector-specific curricula
and apprenticeships, ensuring a more integrated and practical skill development approach.
Establishing a dedicated coordination mechanism or oversight committee could help track
training offerings, align them with regional MSME needs, and avoid programmatic overlap.
iv. Training program for Rural and Women Artisans:
The schemes such as Coir Vikas Yojana, National SC-ST Hub Scheme, and Khadi
& Village Industries programs can continue to operate independently, with training
initiatives focused on promoting traditional crafts, rural industries, marginalized
communities, and women’s entrepreneurship for inclusive development.
However, convergence through a unified training framework—such as a shared pool
of expert trainers and collaboration with industry partners—can enhance the quality
and consistency of training across schemes. Such an approach allows for flexibility
while addressing the specific capacity-building needs of diverse beneficiary groups.
Implementation Framework
To implement the recommended convergence of various MSME skill development schemes,
a structured approach is necessary to streamline the processes while ensuring effective
coordination among stakeholders. The Ministry of MSME, or a designated institution,
may serve as the central coordinating authority for convergence, supported by key
stakeholders such as the Inter-ministerial Steering Committee, MSME policy bodies, skill
scheme administrators, and financial authorities. The following framework outlines key
steps for the successful implementation of the proposed convergence:
1. Governance and Oversight Mechanism
A dedicated Inter-ministerial Steering Committee for Skill Development in the MSME
sector can be established, comprising representatives from relevant government
agencies responsible for skilling and entrepreneurship, skill development institutions,
policy research and advisory organizations, institutional stakeholders within the MSME
sector, and financial institutions. This committee will play a central role in overseeing
the integration of programs, ensuring effective inter-ministerial coordination, and
providing strategic direction for skill development initiatives across various sectors.
2. Implementation Approach
i. Entrepreneurship and Business Skills Development Program
For Entrepreneurship and Business Skills Development Program, NSDC’s existing
e-learning platforms and partner training institutes of MoMSME can be used for
online and in-person training. Collaborations with industry associations, banks, Achieving Efqciencies in MSME Sector through Convergence of Schemes 73
and financial institutions may be made to provide practical training in business
management and credit access. Clear KPIs should be established to track the
success of training programs, such as the number of MSMEs trained, certifications
awarded, and business growth metrics.
ii. MSME Technical Skill Development Program
For coordination of technical programs, the technical and technological training
components can be maintained under their respective schemes, but improve
coordination. To do this, the Steering Committee under the Ministry of MSME can
oversee the alignment of training programs offered by Tool Rooms, Technical
Institutions, and Technology Centres. The MSME Sampark Portal can be used
to consolidate the offerings of Tool Rooms, MSME Lean Scheme, MSME Digital,
and other technical institutions. Programs must be tailored based on specific
industry needs, ensuring that training covers lean manufacturing, digitalization,
and the adoption of advanced technologies. Training programs should be adapted
to the needs of MSMEs in specific regions to ensure relevance and maximum
impact. Feedback from MSMEs should be collected on the usefulness of the
training programs, and regularly update the curriculum to meet emerging industry
requirements.
iii. Training program for Rural and Women Artisans
A cross-scheme pool of expert trainers could be created - who can provide
specialized training across these sectors, ensuring consistency and quality.
Partnership with local cooperatives, women’s self-help groups (SHGs), and industry
partners can be built to enhance the market-readiness of trained artisans and rural
entrepreneurs. It should be ensured that skill development programs for women
and marginalized communities include components like digital marketing, branding,
and e-commerce for expanding market access
3. Funding Mechanism
A unified funding framework can be considered by pooling financial resources from
various schemes such as PMEGP, IC, PMS, and other MSME technical schemes under
the broader MSME Skill Development budget. This integration would require close
coordination with the Ministry of Finance. A transparent system for resource allocation
is encouraged, based on regional demands, target sectors, and the number of MSMEs
participating in each program. Additionally, a performance-based funding model may
be adopted, where training institutions receive additional funds based on specific
metrics such as course completion rates, MSME growth post-training, and job creation
outcomes.
4. Capacity Building and Strengthening of Training Infrastructure
To support the increased demand from converged programs, efforts can be made
to strengthen existing training infrastructure, including NSDC-affiliated institutions,
MSME Tool Rooms, and Technology Centres. A comprehensive trainer capacity-
building program is encouraged to enhance the capabilities of trainers across business ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 74
and technical domains. It is advisable that all participating training institutes be
accredited through NSDC to ensure consistent quality standards. A dedicated space
for collaboration between industries, training institutions, and MSMEs could further
enable co-development of industry-relevant courses and apprenticeships. The MSME
Sampark portal may also be upgraded to enhance functionality and accessibility by
incorporating these additional features:
Single Window Access: Integrate MSME Sampark with platforms like the Skill India
Digital Hub and National Career Service to provide a single access point for all
MSME skill development programs and resources.
Integrated Training Calendar: Add a real-time, centralized training calendar with
filters by scheme, region, and course type, along with SMS/email notifications for
session reminders.
Multilingual Support: Provide platform access in multiple regional languages for
wider accessibility.
5. Monitoring and Evaluation (M&E)
An integrated online monitoring system is recommended to track the progress of
the convergence initiative. Key performance indicators may include the number of
MSMEs trained across schemes, participant satisfaction, business growth post-training,
and employment generation. A periodic third-party evaluations can be conducted to
assess the effectiveness and impact of the strategy, enabling continuous improvement.
6. Awareness and Outreach
It is important to design and implement comprehensive awareness campaigns that
specifically target MSMEs located in rural and underserved regions. These campaigns
should aim to inform stakeholders about the range of training programs available
and highlight the tangible benefits of skill development. In addition, building strong
public-private partnerships can play a crucial role in expanding the reach of these
initiatives. Industry partners may be actively involved in co-developing training content
and participating in outreach activities, thereby ensuring that MSMEs are not only
aware of the opportunities under the converged schemes but are also well-equipped
to take full advantage of them.
7. Timeline
Months
02 46 81 01 21 41 61 8
Phase III
(12-18 months)
Phase II
(6-12 months)
Phase I
(0-6 months)
Formation of Steering Committee, Merging & coordination,
Upgrading MSME SAMPARK Portal, Resource allocation
Rollout of merged skill programs, Awareness campaigns,
Monitor!ng system setup, Feedback collection
Full scale implementation,
M&E and program adjustments
IMPLEMENTATION TIMELINE Achieving Efqciencies in MSME Sector through Convergence of Schemes 75
Benefits
The key benefits of the skill development convergence approach across all three cases are:
Resource Optimization
and Efficiency
2
3
4
1
Enhanced Access to
Comprehensive Skill
Sets
Targeted Support for
Diverse Beneficiary
Groups
Improved M&E
and Impact
Measurement
The skill development convergence approach offers key benefits by optimizing resources,
enhancing access to comprehensive skill sets, and providing tailored support for
diverse beneficiary groups. By integrating similar components across programs, such
as entrepreneurship and technical skills, the framework reduces duplication, maximizes
resource allocation, and streamlines administrative processes for cost-effective training
delivery. Beneficiaries gain access to a broader skill range, meeting the evolving needs of
MSMEs in both traditional and modern markets. Each convergence case targets specific
groups—like rural and women artisans or MSMEs needing technical skills—ensuring inclusive,
relevant training across all MSME clusters. Additionally, the unified framework enables
better monitoring and evaluation, allowing for real-time improvements and impactful skill
development that directly supports MSME growth and competitiveness.
Challenges
The key challenges faced in all three cases of skill development convergence are:
Fragmentation in Skill Development Schemes: The MSME sector comprises a diverse
range of entrepreneurs, including informal micro-enterprises, each with distinct skill
training needs. Multiple schemes currently address these needs, but their objectives, target
beneficiaries, and technical aspects vary. While certain components of skill development
may appear suitable for integration, a full merger may not be feasible due to these
structural differences. Additionally, efforts are already underway to enhance coordination
among key stakeholders, including the Ministry of MSME, the Ministry of Skill Development
and Entrepreneurship (MSDE), GeM, and SIDBI, to identify common ground and improve
alignment where possible. Nevertheless, can be pursued if: ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 76
A standardized framework is developed to accommodate sector-specific training
needs within a unified system.
Stakeholders collaborate to streamline skill development efforts while retaining the
flexibility needed for targeted interventions.
Coordination Across Multiple Schemes: Integrating skill development components from
various schemes like PMEGP, IC, ESDP, Tool Rooms, and Technology Centres involves
aligning different objectives, funding structures, and timelines. This can lead to coordination
difficulties and administrative delays.
Varied Beneficiary Needs: MSMEs in different sectors, such as rural artisans or high-
tech industries, have diverse skill requirements. Therefore, designing a unified training
approach that caters to all these groups without compromising relevance or quality can
be challenging.
Capacity Constraints in Implementing Agencies: Many training institutions, tool rooms,
and technical centers may lack the capacity to handle the increased scale and complexity
of delivering converged training programs, leading to inefficiencies or delays.
Resistance to Change: Traditional industries and artisans, particularly in rural areas, may
resist new training models or technologies. This can hinder the adoption of advanced
skills, limiting the overall impact of the convergence initiative.
RECOMMENDATION 4: PROCUREMENT AND MARKETING
SUPPORT (PMS) & INTERNATIONAL COOPERATION (IC)
The Procurement and Marketing Support includes various components such as awareness
programs, Vendor Development Programs (VDPs), workshops, reimbursement for modern
packaging and barcodes, promotion of e-commerce adoption, and retail outlet development.
Its primary focus is on reaching first-time beneficiaries and those in aspirational districts.
On the other hand, the International Cooperation scheme supports MSMEs through market
development assistance in trade fairs (limited to group participation, not individuals),
Capacity Building for First-time MSE Exporters (CBFTE), and an International Market
Intelligence Dissemination (IMID) framework. The target group for this scheme is generally
more aware and experienced in market exposure. While both schemes aim to provide
marketing assistance, they differ in their components and target beneficiaries as discussed
in the table below. Achieving Efqciencies in MSME Sector through Convergence of Schemes 77
Table 5.5: Comparison between Procurement and Marketing
Support (PMS) and International Cooperation (IC) Scheme
Aspect
Procurement and Marketing Support
(PMS)
International Cooperation (IC) Scheme
Objective
To enhance market access for
MSMEs by supporting participation
in domestic trade fairs, exhibitions,
e-commerce, and procurement
processes.
To facilitate MSME participation in
international trade events, promote
exports, and foster global collaboration
through technology exchange and
business partnerships.
Target
Audience
Micro, Small, and Medium
Enterprises (MSMEs), particularly
those seeking better market access
and government procurement
opportunities.
MSMEs, industry associations, and
export-oriented enterprises aiming to
expand into international markets and
adopt global best practices.
Support
Mechanism
Provides financial assistance for
MSMEs to participate in trade
fairs, B2B meetings, and vendor
development programs. Supports
e-commerce onboarding and
government procurement linkages.
Offers funding for MSMEs to attend
international exhibitions, trade
delegations, and technology exchange
programs. Encourages global
networking and collaboration.
Skill
Development
Conducts training programs on
marketing strategies, branding,
quality certification, and
procurement procedures.
Supports training in international
business practices, export compliance,
quality standards, and global trade
regulations.
Access to
Finance
Offers financial support for
exhibition space rental, stall setup,
and branding expenses.
Provides financial assistance for travel,
participation fees, and promotional
activities in international markets.
Technology
Integration
Encourages MSMEs to adopt digital
marketing, e-commerce platforms,
and advanced branding techniques
to improve sales.
Facilitates MSME exposure to global
technology trends, R&D collaborations,
and best manufacturing practices
through international partnerships.
Government
Support
Implemented by the Ministry of
MSME through various support
programs, including GEM
(Government e-Marketplace)
integration.
Managed by the Ministry of MSME,
supporting industry associations and
enterprises in forming global trade
alliances and technology partnerships.
Therefore, it is proposed to integrate the PMS and IC Schemes into a unified framework
with two key components: Domestic Marketing Assistance and International Marketing
Assistance. This approach will simplify MSMEs’ access to support while fostering
a comprehensive market development strategy that evolves with their needs. By
optimizing processes and resources, this integrated model will enhance efficiency and
synergy, ultimately strengthening government support as MSMEs expand from local to
global markets. Also, MSMEs that aim to transition from domestic marketing support to
international marketing support can do so seamlessly through a unified framework. Achieving Efqciencies in MSME Sector through Convergence of Schemes 78
The proposal emphasizes convergence and not merger of the schemes, ensuring that the
PMS and IC Schemes continue to serve their respective target groups while functioning
within a cohesive framework that maximizes their collective impact.
Convergence Framework
To streamline marketing support for MSMEs, a dedicated Marketing Wing is proposed,
comprising two key sub-components:
Domestic Marketing AssistanceInternational Marketing Assistance
Marketing
Assistance Wing
Product Quality, packaging, Brand promotion, e-commerce, adoption of bar code,
Workshops, Seminars
1.Capacity Building through
ESDP
2.Organizing and participating
in domestic trade
fairs/exhibitions
3.Domestic procurement
1.Capacity Building through ESDP for
first-time exporters
2.Organizing and participating in
international trade fairs/ exhibitions
3.Framework for International Market
Intelligence Dissemination
Features of Domestic Marketing Assistance wing:
The Domestic Marketing Assistance wing is proposed to focus on facilitating the
participation of MSMEs in national-level exhibitions, trade fairs, and buyer-seller meets
across the country. As part of this initiative, support may be extended to help MSMEs
improve branding, enhance product development, and access e-commerce platforms to
expand their domestic market reach. The wing may assist in promoting linkages between
MSMEs and large-scale industries, as well as government departments, by encouraging
participation in procurement processes through platforms such as the Government
e-Marketplace (GeM). Additionally, financial support may be provided to enable MSMEs
to set up stalls at domestic trade events, with the overall objective of strengthening their
visibility and market presence within India. Achieving Efqciencies in MSME Sector through Convergence of Schemes 79
Features of International Marketing Assistance wing:
The International Marketing Assistance wing can be designed to support MSMEs in accessing
global markets by facilitating their participation in international trade fairs, business-to-
business (B2B) events, and buyer-seller meets abroad. It can offer financial subsidies to
help enterprises explore international markets, obtain product certifications, and undertake
export promotion activities. To prepare MSMEs for global competition, this wing should
provide export readiness programs aimed at enhancing their capabilities in compliance,
quality standards, and documentation. Additionally, both financial and logistical support
can be extended for international marketing initiatives, including promotional events and
participation in trade delegations to key overseas markets.
Implementation Framework
The proposed implementation framework for the Marketing Assistance Wing focuses on
operationalizing the Domestic Marketing Assistance and International Marketing Assistance
components to effectively support MSMEs. Relevant MSME policy-making bodies, in
collaboration with state governments, industry experts, marketing professionals, external
evaluators, and other key stakeholders, will play a crucial role in designing, executing,
and monitoring marketing support interventions. This framework consists of several key
elements:
1. Governance Structure
Creation of the wing, comprising representatives from relevant government departments,
industry associations, and MSME stakeholders to oversee the implementation of
the unified marketing assistance framework. Form dedicated teams for Domestic
and International Marketing Assistance, each responsible for program development,
execution, and evaluation.
2. Resource Allocation and Budgeting
A balanced and responsive approach to resource allocation is advisable, ensuring
that funding is distributed equitably between domestic and international components
in accordance with program demand and actual uptake. This ensures that both
segments receive the necessary support to grow and scale effectively. Additionally, it
is recommended to explore collaborative partnerships with private sector entities and
international organizations to secure supplementary funding and technical support.
Such partnerships can enhance the sustainability and reach of marketing initiatives,
while also bringing in global best practices and innovative models of implementation.
3. Program Development and Design
Domestic Marketing Assistance:
In enhancing domestic marketing assistance for MSMEs, it would be beneficial to
develop a comprehensive calendar of key national events, exhibitions, and trade fairs
where MSMEs can showcase their products. Alongside this, establishing a streamlined
and accessible application process for financial support will help MSMEs participate
more effectively in these events. Strengthening collaboration with design experts and Achieving Efqciencies in MSME Sector through Convergence of Schemes 80
marketing professionals is encouraged to facilitate specialized workshops and offer
one-on-one consulting on branding strategies and product improvements. Partnerships
with leading e-commerce platforms may also be explored, along with providing MSMEs
with the necessary tools, training, and handholding to develop and maintain a robust
online presence. Additionally, forging linkages with large-scale industries can help
create procurement opportunities, while platforms like the Government e-Marketplace
(GeM) may be leveraged to connect MSMEs with government buyers.
International Marketing Assistance:
For international marketing assistance, it is advisable to begin by identifying and
prioritizing key global markets that align with the strengths and potential of Indian
MSMEs. Financial assistance schemes could be designed to support enterprises aiming to
explore these markets. Targeted training programs focusing on international compliance
requirements, market research techniques, and export documentation processes would
help prepare MSMEs for global trade. Strategic partnerships with logistics and shipping
companies could be considered to provide MSMEs with preferential rates and logistical
support during international outreach efforts. Moreover, organizing trade missions to
selected countries, supported by both logistical coordination and financial subsidies,
can significantly enhance the global visibility and competitiveness of Indian MSMEs.
4. Communication and Outreach
It is advisable to design and implement comprehensive awareness campaigns to
effectively inform MSMEs about the newly established unified marketing assistance
framework. These campaigns should communicate the types of support available under
both domestic and international components, along with step-by-step guidance on
how to access these resources. To further support MSMEs in navigating the system,
a dedicated single-point contact mechanism—such as a national helpline—may be
established. This helpline can serve as a reliable source of information and assistance,
addressing queries related to eligibility, application procedures, and program benefits,
thereby ensuring timely and accurate support for MSMEs across the country.
5. Monitoring and Evaluation
To ensure the effectiveness of the unified marketing assistance framework, it is
recommended to develop a set of clearly defined KPIs for both the domestic and
international components. These indicators may include the number of MSMEs supported
through the program, measurable increases in sales and market reach, participation
rates in training sessions and promotional events, and other relevant impact metrics.
Establishing such performance benchmarks will enable continuous monitoring and
facilitate evidence-based decision-making. In parallel, a structured feedback mechanism
should be implemented to gather insights directly from participating MSMEs regarding
the relevance and utility of the assistance provided. Incorporating MSME feedback into
program design will help refine strategies, improve delivery mechanisms, and ensure
the initiatives remain responsive to the evolving needs of the sector. Achieving Efqciencies in MSME Sector through Convergence of Schemes 81
6. Timeline
Months
02 46 81 01 21 41 61 8
Phase III
(12-18 months)
Phase II
(6-12 months)
Phase I
(0-6 months)
Focus on planning,governance,stakeholderengagement,
developing and designing the program components
Conduct communication and outreach to raise awareness of the programs;
Pilot the programs, collect feedback, and refine them based on insights.
Full-scale implementationof Marketing
Assistance Wing, M&E and program adjustments
IMPLEMENTATION TIMELINE
Benefits
The key benefits of the above-mentioned convergence approach are:
Simplified Acces
2
3
4
1
Efficient fund
utilization
Integrated Marketing
Strategy
Scalability
The convergence of the domestic and International marketing-based schemes into a
unified framework offers several key benefits for MSMEs. Firstly, it provides simplified
access, enabling MSMEs to engage with a single point of contact for all their market
promotion activities, thus eliminating the confusion and complexity of navigating multiple
schemes. This consolidation not only streamlines the process but also enhances efficiency
by reducing administrative costs and complexity associated with overlapping components.
As a result, resources can be utilized more effectively, ensuring that support reaches
the intended beneficiaries. Moreover, the integrated marketing strategy aligns domestic
and international marketing efforts, creating a comprehensive market access strategy
that caters to the diverse needs of various MSMEs. This holistic approach allows for
scalability, as enterprises can begin by leveraging domestic market assistance to build Achieving Efqciencies in MSME Sector through Convergence of Schemes 82
their capabilities and confidence before transitioning to international marketing support as
they grow. Ultimately, this convergence fosters an environment where MSMEs can thrive,
adapt, and compete effectively in both local and global markets.
Challenges
Different Target Groups: The primary focus of PMS is on reaching first-time beneficiaries,
including those from aspirational districts, to enhance their domestic market reach. The
IC Scheme, on the other hand, is designed to support market development for MSMEs
at an international level. The MSMEs benefiting from IC generally have higher awareness
and exposure compared to those under PMS. Nevertheless, convergence can be explored
if a tiered support mechanism is developed, where PMS focuses on domestic market
preparedness while IC provides advanced international market support. A sequential
progression model could be introduced, allowing MSMEs to transition from PMS to IC
once they meet specific eligibility criteria.
Administrative Disruptions: Merging the two schemes may result in initial administrative
disruptions. Existing bureaucratic structures may need to be realigned, and staff may need
training to adapt to the unified scheme’s new processes and objectives, which could lead
to delays and resistance.
Resource allocation: Deciding how to allocate resources between domestic and
international components could be a challenge. The demands of international marketing
activities often require substantial funding, potentially leading to an imbalance where
resources for domestic support are reduced.
Barriers for Smaller Enterprises: Smaller or newly established MSMEs may feel overwhelmed
by a single scheme that encompasses both domestic and international components. They
may find it challenging to understand and access the appropriate support, especially if
they are not yet ready for international exposure.
Market Dynamics: The dynamics of domestic and international markets are vastly different.
Strategies that work domestically may not be applicable internationally. Designing a unified
scheme that can effectively adapt to both sets of market conditions without compromising
the quality of support could be difficult. Therefore, it is very important to design the
scheme with flexible options so MSMEs can choose the type of support that fits their
current stage and requirements. The scheme guidelines should provide clear guidelines,
establish clear roles, responsibilities, and communication channels, allocate resources in a
balanced manner, and review periodically to ensure neither component is underfunded.
RECOMMENDATION 5: MSME INNOVATIVE & A SCHEME
FOR PROMOTING INNOVATION, RURAL INDUSTRIES &
ENTREPRENEURSHIP (ASPIRE)
It has been observed that the ASPIRE scheme has relatively low awareness despite being an
established scheme. On the other hand, MSME Innovative, which offers similar support for
promoting innovation and entrepreneurship, is widely recognized and utilized by MSMEs.
Given the overlap in objectives and support structures between these two schemes, it
is proposed to mere ASPIRE with MSME Innovative. The ASPIRE scheme, which aims to
promote rural entrepreneurship and innovation, has experienced limited uptake due to Achieving Efqciencies in MSME Sector through Convergence of Schemes 83
gaps in awareness, outreach, and alignment with market realities. By converging it with
MSME Innovative—which has broader visibility and greater adoption—the resources of
ASPIRE can be better utilized.
The MSME Innovative scheme is an amalgamation of three former schemes—Incubation,
Design, and IPR Schemes of the Ministry of MSME
92
. It is a component of the MSME
Champions Scheme and was established to provide a holistic approach by unifying,
synergizing, and converging three sub-schemes under a common objective. Similarly,
the ASPIRE scheme promotes innovation in agro and rural-based enterprises through
incubators. Integrating ASPIRE with MSME Innovative can create a more cohesive and
effective framework to support innovation across all MSMEs, including the agro-rural
sector. The table below provides details of the similarities between both schemes:
Table 5.6: Comparison between MSME Innovative and ASPIRE
AspectMSME InnovativeASPIRE
Objective
Promote innovation and
entrepreneurship in MSMEs.
Supporting Business Incubators
(BI).
Promote innovation, and
entrepreneurship in the agro and rural-
based industries. Setting up Livelihood
Business incubators (LBI).
Target
Audience
MSMEs across sectors
Agro- Rural entrepreneurs, and start-
ups
Support
Mechanism
Financial support, incubation,
hand-holding, and R&D assistance
Livelihood Business Incubators (LBIs),
financial support, hand-holding and
R&D assistance
Skill
Development
Provides training to enhance
MSME capabilities
Focus on entrepreneurship and skill
development through incubators
Access to
Finance
Provides grants and funding
opportunities for procuring plant
& machinery, nurturing ideas – HI
& BI.
Offers financial assistance to LBI, HI
& MI for procuring plant & machinery,
nurturing ideas and operational
expenses.
ASPIRE Fund of Funds with SIDBI
used
Technology
Integration
Promotes the adoption of
advanced technologies
Adoption of new technologies in the
agro-rural sector.
Government
Support
Ministry of MSMEMinistry of MSME
Both schemes—MSME Innovative (Incubation) under MSME Champions and ASPIRE—share
the same objective of fostering innovation through incubation, utilizing a similar funding
mechanism through Host Institutes. However, ASPIRE specifically focuses on the agro-rural
sector, while MSME Innovative targets the entire MSME spectrum. Another difference is
that ASPIRE has a separate Fund of Funds managed by SIDBI to invest in early-stage
enterprises and start-ups within the agro-rural sector.
92 GUIDELINES/ MSME INNOVATIVE/ 2021-2022 Achieving Efqciencies in MSME Sector through Convergence of Schemes 84
Convergence Framework
MSMEInnovative
ASPIRE
Incubation
Design
IPR
ASPIRE could be integrated into MSME Innovative as a special category dedicated to
agro-rural enterprises. The existing corpus fund available under the ASPIRE Fund of Funds
until the current financial year can be utilized as it is. However, from the upcoming financial
years, a certain percentage of the budget of MSME Innovation can be reserved specifically
for incubators related to the agro and rural economy.
While ASPIRE primarily focuses on agro-based incubators, its integration within MSME
Innovative will not limit the scope to agriculture alone. Instead, it will broaden access
to advanced technology incubation by leveraging the already diverse framework of
MSME Innovative. This approach will ensure a balanced, sector-agnostic model while
still addressing the specific needs of agro-based startups.
Implementation Framework
Authorities responsible for MSME development, along with key functionaries of
ASPIRE and MSME Innovation, relevant financial institutions, state governments,
and external evaluators, will play critical roles in designing, executing, financing, and
assessing this integration. The implementation framework for integrating ASPIRE
into MSME Innovation as a special category for agro-rural enterprises would be:
1. Strategic Planning and Budget Allocation
It is important to begin by clearly outlining the objectives for integrating ASPIRE
within the MSME Innovation framework, with a specific focus on supporting agro-rural
enterprises. As part of the budget planning process, a defined percentage of MSME
Innovation’s budget should be allocated to agro-rural-focused incubators starting
from the upcoming financial year. During the transition period, the existing corpus
under ASPIRE’s Fund of Funds can be allocated to support agro-rural incubators. A
structured plan should also be developed for budget allocation post-convergence,
ensuring that Host Institutes (HIs), Livelihood Business Incubators (LBIs), and Mentor
Institutes (MIs) that specialize in agro-rural enterprises continue to receive targeted
support and maintain program continuity. Additionally, it is advisable to conduct
consultations with key stakeholders, including government bodies, incubators, and rural
enterprise representatives, to align on program objectives and implementation needs. Achieving Efqciencies in MSME Sector through Convergence of Schemes 85
2. Establish the Agro-Rural Enterprise Category in MSME Innovation
A dedicated category under MSME Innovation should be created specifically for agro-
rural enterprises. Within this category, eligibility criteria and operational guidelines
need to be established to direct funding and support to Host Institutes, Livelihood
Business Incubators, and Mentor Institutes that focus on agro-rural industries. To
ensure broad awareness and uptake, an outreach campaign could be launched to
inform potential incubators and MSMEs operating in agro-rural sectors about this new
support mechanism.
3. Operationalize and Support Agro-Rural Incubators
Disbursement of grants could commence for Host Institutes, LBIs, and MIs based
on their eligibility and alignment with the goals of supporting agro-rural enterprises.
In parallel, training and capacity-building programs can be organized to strengthen
the capabilities of these incubators in serving agro-rural communities effectively. A
monitoring framework needs to be established to assess the early impact and overall
progress of the incubators receiving support under this initiative.
4. Review, Feedback, and Budget Continuity (Ongoing/Annually)
At the end of each financial year, a review could be conducted to evaluate the
performance and impact of the agro-rural category within the MSME Innovation
program. Feedback should be gathered from participating incubators and supported
MSMEs to identify areas for improvement and enhance program effectiveness. Based
on the outcomes of the review, the reserved budget percentage allocated to agro-
rural enterprises within MSME Innovation may be adjusted to ensure that targeted and
continuous support is sustained over time.
5. Timeline:
02 46 81 0
Months
12 14 16 18
Phase IV
(Annual)
Phase III
(10-15 months)
Phase II
(5-10 months)
Phase I
(0-5 months)
Strategie Planning and
Program Realignment
Institutional Coordination
and Governance Mechanism
Program Implementation and
Cluster Identification
Monitoring and
Evaluation
IMPLEMENTATION TIMELINE Achieving Efqciencies in MSME Sector through Convergence of Schemes 86
Benefits
The key benefits of the proposed convergence approach are:
Broader Access to
Resources
2
3
4
1
Enhanced Digital
Transformation
Integrated Support
and Expertise
Focused Financial
Support
The convergence of ASPIRE with MSME Innovative brings several key benefits for agro-
rural industries. First, it enables broader access to essential resources, such as support
for Design and Intellectual Property Rights (IPR), which helps agro-based enterprises
develop unique products and protect their innovations. Additionally, agro-rural businesses
stand to benefit from MSME Champions’ digitization initiatives, giving them greater access
to digital tools and platforms that can improve productivity, expand market reach, and
enhance adaptability in today’s economy. The merger also integrates ASPIRE into a larger,
comprehensive support system within MSME Innovative, granting agro-rural enterprises
access to a wider range of expertise and resources, ultimately streamlining their experience
in receiving aid. Lastly, the inclusion of a reserved budget for agro-rural initiatives ensures
sustained and focused financial support for Host Institutes, Livelihood Business Incubators
(LBIs), and Mentor Institutes (MIs), enabling them to grow without competing for resources
allocated to other sectors.
Challenges
Risk of Dilution of Focus: There is a potential risk that the distinct focus of ASPIRE on
agro-rural industries may be diluted within the broader framework of MSME Innovative.
Ensuring dedicated resources and attention to agro-rural needs will be essential.
Complex Resource Management: Allocating resources specifically for agro-rural enterprises
within a larger MSME budget could create administrative complexities. Clear guidelines
and oversight, possibly managed by SIDBI, would be required to avoid resource diversion
to other areas. Achieving Efqciencies in MSME Sector through Convergence of Schemes 87
Maintaining Specialized Support for LBIs: The merger could make it challenging to retain
ASPIRE’s unique focus on Livelihood Business Incubators (LBIs) essential for agro-rural
development. SIDBI’s continued involvement in managing the reserved budget would help
maintain this targeted support.
Potential Operational Adjustments for Stakeholders: With ASPIRE integrated, stakeholders
accustomed to its standalone operation might face initial adjustments to align with MSME
Innovative processes. Transition support and training will be needed to facilitate a smooth
adaptation to the new structure. 88
WAY FORWARD:
ENSURING EFFECTIVE AND INCLUSIVE MSME SUPPORT
MECHANISMS
Considering feedback from stakeholders and research findings, it is recommended
that a cautious approach be taken regarding the merging of existing MSME schemes,
particularly those created for specific target groups. Maintaining the integrity of targeted
initiatives like the National SC/ST Hub and the Promotion of MSMEs in the North Eastern
Region (NER) is crucial, as these programs address unique socio-economic and cultural
challenges. Merging such schemes could dilute their effectiveness and hinder their ability
to provide focused support to marginalized communities. Similarly, programs with a
broad beneficiary base, like the Prime Minister’s Employment Generation Programme
(PMEGP), should remain untouched, as they serve a diverse array of MSMEs and play an
essential role in job creation and economic growth. Their large-scale impact should not
be compromised through convergence. For schemes where convergence is not possible,
enabling collaboration among different programs could be the ideal approach. This can be
achieved through joint workshops, training sessions, and outreach efforts that maximize
each scheme’s impact while ensuring that the distinct needs of specific groups are met.
Additionally, training and resources for administrators should be prioritized to enhance
their understanding of the unique challenges faced by various communities, enabling them
to provide more tailored support and interventions.
However, for schemes with similar objectives and delivery mechanisms, convergence
should be prioritized, allowing for optimal resource utilization and reducing administrative
redundancies. This process must be accompanied by a robust mechanism to prevent
inefficiencies and ensure that the intended beneficiaries continue to receive targeted
support. To facilitate effective implementation, a coordinated governance structure
should be established to oversee the transition, address operational challenges, and track
outcomes. 89
ANNEXURE I
MOMSME SCHEMES:
S No. SchemesGuidelines
1 MSME Champions
https://dcmsme.gov.in/CLCS_TUS_Scheme/MSME%20
Innovative%20Scheme%20Guidelines.pdf https://www.
dcmsme.gov.in/schemes/clcs-tus/LEAN-Operational-
Guidlelines.pdf https://zed.msme.gov.in/uploads/Subsidy_
Women.pdf
2
Raising and Accelerating
MSME Performance
(RAMP)
https://www.nimsme.org/news-article/raising-accelerating-
msme-performance-ramp-scheme
3
International Cooperation
(IC) Scheme
https://ic.msme.gov.in/IC_APP/WriteReadData/GuideLine/
Final%20and%20approved%20IC%20Scheme%20
Guidelines-2021.pdf
4
Assistance to Training
Institutions (ATI) Scheme
https://msme.gov.in/sites/default/files/PDF%20
REVISED%20ATI%20GUIDELINES%20English%20
1.9.2016%20%281%29.pdf
5
Technology Centres
Scheme
https://dcmsme.gov.in/CLCS_TUS_Scheme/
new-Technology-Centers/Scheme_Guidelines.
aspx#:~:text=by%20these%20Centres-,Guidelines,the%20
vacant%20built%20up%20spaces.
6
Marketing Assistance
Scheme
https://msme.gov.in/sites/default/files/MASCHEME-
New-18112014.pdf
7
Promotion of MSME in
NER and SIKKIM
https://www.dcmsme.gov.in/schemes/Revised_Guidelines_
on_31May2022.pdf
8
Self-Reliant India (SRI)
Fund
https://dcmsme.gov.in/Final%20SRI%20Operating%20
Guidelines%20%20approved%20by%20Minister%20%20
17%2008%202021.pdf
9
Credit Guarantee Scheme
for Micro & Small
Enterprises (CGTMSE)
https://www.cgtmse.in/Default/
ViewFile/?id=1673390907997_CGTMSE%20-%20
Scheme%20Document%20CGS%20I_updated%20as%20
on%20Jan%2010,%202023.pdf&path=Page
10
Procurement and
Marketing Support (PMS)
Scheme
https://dcmsme.gov.in/OM%20&%20PMS%20Scheme%20
Guidelines.pdf ?"#0#(! q#(#- #( .), .",)/!" ?)(0,!( ) "'- 90
11
Prime Minister’s
Employment Generation
Programme (PMEGP)
https://www.kviconline.gov.in/pmegp/pmegpweb/docs/
pdf/PMEGPscheme.pdf
12
Entrepreneurship Skill
Development Programme
(ESDP) Scheme
https://msmedi.dcmsme.gov.in/Manuals/Approved%20
ESDP%20Guidelines_new.pdf
13
A Scheme for
Promotion of Innovation,
Rural Industries and
Entrepreneurship (ASPIRE)
https://aspire.msme.gov.in/WriteReadData/DocumentFile/
ASPIRE_NEW.pdf
14
Scheme of fund for
regeneration of traditional
industries (SFURTI)
https://sfurti.msme.gov.in/WriteReadData/Circular/
SFURTI_NEW.pdf
15
Micro & Small Enterprises
Cluster Development
Programme (MSE-CDP)
Scheme
https://www.dcmsme.gov.in/schemes/New-Guidelines.pdf
16
National SC-ST Hub
Scheme
https://www.scsthub.in/sites/default/files/NSSH_
Guidelines_o.pdf
17Coir Vikas Yojana
https://msme.gov.in/sites/default/files/Revised_Operation_
Guidelines_of_CVY.pdf
18
Khadi Gramodyog Vikas
Yojana
https://msme.gov.in/sites/default/files/
RevisedoperationalGuidelinesofGVY.pdf
19
PM Vishwakarma -
Enabling Artisans and
Craftspeople to Build
Enterprises
https://jrgbank.in/tenders/PM%20VISHWAKARMA-
SCHEME%20GUIDELINES.pdf 91
ANNEXURE II
STATE SCHEMES:
Telangana:
S. NoScheme NameGuidelines
1
T-IDEA (Telangana State
Industrial Development and
Entrepreneur Advancement)
Incentive Scheme, 2014
https://industries.telangana.gov.in/Li-
brary/2015INDS_MS77.pdf
2
T –PRIDE(Telangana State
Programme for Rapid Incubation
of Dalit Entrepreneurs Incentive
Scheme)
https://industries.telangana.gov.in/Li-
brary/2015INDS_MS78.pdf
3
Telangana State Industrial Project
Approval and Self-Certification
System (TS-iPASS)
https://ipass.telangana.gov.in/viewpdf.aspx-
?enc=olSBrXl6rl1gh1Zl/gAtCIkxOo/1mEK3ZEGd-
edYO3dbgHlf+VSWFL6LVs+mm8Rg6nTRHe7ix-
LA1Uzvt6vtEOd7yNOlXTsEGt9qK4Uv6FedkHCt/
kkWVR29+JYNYHIZscBFbJdq58wnda+4yAdp-
gLl0kO7S3ylF5rB2c2iHYP+7tg9EjvNHByfVEv-
NylEWGg+UoSdX02uK/fnSHrc+5C7QINOm-
v0Fbs9y8Mef1uZRoL8=
4
Scheme for economic
development of ST entrepreneurs
https://startup.telangana.gov.in/wp-content/up-
loads/2021/06/cmstei_scheme_details.pdf
5 Self Employment Scheme
https://industries.telangana.gov.in/selfemploy-
ment.aspx
6 Bank linked schemeshttps://tsmfc.in/schemeinfo.php?id=5
7 Suvidha Incubation
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
8
T-Fund (Telangana Innovation
Fund)
https://www.startupindia.gov.in/content/dam/
invest-india/Templates/public/state_startup_pol-
icies/Telangana-Innovation-Policy-Issued-GO.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 92
S. NoScheme NameGuidelines
9
The Telangana Handloom Weavers
Thrift Fund Saving and
Security Scheme (THWTFSSS)
“Nethannaku Cheyutha”.
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
10
Common fiscal incentives for all
companies
https://www.msmekipathshala.com/webkype/
assets/pdf/SCHEMES%20OF%20DIFFERENT%20
STATE%20GOVERNMENTS%20/SCHEMES%20
DETAIL%20OF%20TELANGANA%20STATE.pdf
Maharashtra:
S.No Scheme NameGuidelines
1
Industrial Promotion Subsidy (IPS)
https://maitri.mahaonline.gov.in/PDF/Industrial%20 Promotion%20Subsidy%20(IPS)%20under%20Indus- trial%20Policy%20-%20modification%20under%20 Goods%20and%20Services%20Tax%20(GST)%20 regime.pdf
2
Interest Subsidy
Incentive
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
3
Exemption from Electricity Duty
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
4 Waiver of Stamp Duty
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
5 Power tariff Subsidy
https://maitri.mahaonline.gov.in/PDF/Package%20 Scheme%20of%20Incentives%20-%202019.pdf
6
Additional Incentives for Strengthening MSMEs
http://di.maharashtra.gov.in/_layouts/15/doistaticsite/ English/investors_guide_psi.html
West Bengal:
S.No Scheme NameGuidelines
1 Bhabisyat Credit Card Scheme
https://wbmsme.gov.in/sites/default/files/cms/ circularpdf/bhabishyat_credit_card.pdf
2 Karma Sathi Prakalpa https://wbxpress.com/files/2021/01/1825-MSMET.pdf
3 Banglashree Scheme
https://www.wbsidcl.in/assets/contents/incentive_ scheme_4420_msmet-09112023.pdf
4
Interest Subsidy on Term Loan (IS)
https://msme.icai.org/wp-content/uploads/2022/12/ West-Bengal-1.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 93
S.No Scheme NameGuidelines
5 Textile Incentive Scheme
https://msme.icai.org/wp-content/uploads/2022/12/
West-Bengal-1.pdf
6 Finance Clinichttps://wbmsmet.gov.in/ki_ies_finclncs
7
Incentive Scheme
2020 for approved
Industrial Park
https://wbmsme.gov.in/sites/all/themes/anonymous/
pdf/SAIP%202020_Notification.pdf
8
Rural
Entrepreneurship Hub
https://wbmsme.gov.in/sites/all/themes/anonymous/
pdf/reh_for_website.pdf
9 Silpa Disha
https://msme.icai.org/wp-content/uploads/2022/12/
West-Bengal-1.pdf
10 Silpa Sathihttps://silpasathi.wb.gov.in/msme_Incentives
11
State Capital Investment
Subsidy
https://wbmsme.gov.in/sites/all/themes/
anonymous/pdf/SAR_642_MS___MAT_Department_
Revenuey_31.07.2020_.pdf
Uttar Pradesh:
S.No Scheme NameGuidelines
1 ODOP Scheme
https://abhinavpahal.nic.in/ uploads/0d7X2fcBcYODOP.pdf
2
Common Facility Centre (CFC) Scheme
https://odopup.in/site/writereaddata/ siteContent/201904171130237521cfc_scheme.pdf
3
Marketing Development Assistance Scheme
https://epbupindia.in/Home/MDA
4
Skill Development and Toolkit Distribution Scheme
https://odopup.in/site/writereaddata/siteContent/201 905081050489239odop-sceam.pdf
5
Uttar Pradesh Chief Minister Youth Self Employment Scheme
https://up.nic.in/news/launch-of-mysy- mukhyamantri-yuva-swarojgar-yojana-portal-for- directorate-of-industries-and-enterprise-promotion- government-of-uttar-pradesh/
6
Scheme for Promoting Establishment of Private Industrial Parks 2017
https://invest.up.gov.in/wp-content/themes/ investup/pdf/Private-Industrial-Park_Scheme.pdf
7 Land Incentives
https://msme.icai.org/wp-content/uploads/2021/06/ UP-MSME-Policy.pdf
8 Land Use Conversion
https://msme.icai.org/wp-content/uploads/2021/06/ UP-MSME-Policy.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 94
S.No Scheme NameGuidelines
9
Special Purpose Vehicles
(SPV) Formation
https://msme.icai.org/wp-content/uploads/2021/06/
UP-MSME-Policy.pdf
10 Stamp Duty Exemption
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
11
Employee Provident Fund
(EPF) Reimbursement
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
12 Capital Interest subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
13 Infrastructure interest subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
14
Industrial quality development
subsidy
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
15 Land conversion waiver
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
16
Electricity charges
reimbursement
https://invest.up.gov.in/uttar-pradesh-micro-small-
medium-enterprises-promotion-policy-2022/
17
A Small, Medium Enterprise
Venture Capital Fund
(SMEVCF)
https://invest.up.gov.in/wp-content/themes/
investup/pdf/Medium-Small-Micro-Enterprise-
brochure.pdf
18
Vishwakarma Shram Samman
Yojna
https://upid.ac.in/vishwakarma-shram-samman-
yojana-vssy/
Gujarat:
S.No Scheme NameGuidelines
1 Gujarat Industrial Policy 2020
https://ic.gujarat.gov.in/documents/ commondoc/2020/Industrial-Policy2020.pdf
2
Gujarat MSME Export Promotion Scheme
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf
3
Assistance of Capital Investment Subsidy
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf
4
Assistance for Interest Subsidy for Manufacturing & Service Sector
https://slbcgujarat.in/wp-content/uploads/2021/04/ Compendium-of-schemes-and-guidelines-for-MSME- sector-Final.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 95
S.No Scheme NameGuidelines
5
Assistance for Quality
Certification (ERP Assistance)
https://slbcgujarat.in/wp-content/uploads/2021/04/
Compendium-of-schemes-and-guidelines-for-MSME-
sector-Final.pdf
6
Net SGST
Reimbursement
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
7
Assistance for Quality
Certification (Quality
certification)
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
8
Financial Support to MSMEs in
ZED Certification
https://ic.gujarat.gov.in/documents/
commondoc/2023/Draft%20ZED%20Guideline.pdf
9
EPF
Reimbursement
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
10
Assistance in implementation
of Information and
Communication Technology
https://ic.gujarat.gov.in/documents/
commondoc/2023/Draft%20ICT%20Guideline.pdf
11
Assistance for Technology
Acquisition
https://ic.gujarat.gov.in/assistance-for-technology-
acquisition.aspx
12
Assistance for Patent
Registration
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
13
Assistance for saving in
consumption of Energy and
Water
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
14
Rehabilitation of
Sick Enterprises
https://imd.gujarat.gov.in/Document/2016-7-29_650.
15 Power connection charges
https://msme.icai.org/wp-content/uploads/2022/12/
Gujarat.pdf
16 reimbursement of rent
17
Assistance for raising Capital
through SME Exchange
https://ic.gujarat.gov.in/documents/pagecontent/
Sme%20Final%20Guideline_24-10-2017-gen.pdf
Tamil Nadu:
S.No Scheme NameGuidelines
1
Grant of Quality Certification Reimbursement of Charges (Qcert)
https://www.msmetamilnadu.tn.gov.in/pdf/ msme_e_35_2019.pdf
2
Promotion of Energy Audit and Conservation of Energy (PEACE)
https://msmeonline.tn.gov.in/incentives/pdf/peace_ ea_cye.pdf Achieving Efqciencies in MSME Sector through Convergence of Schemes 96
Achieving Efficiencies in MSME Sector through Convergence of Schemes
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026
S.No Scheme NameGuidelines
3
New Entrepreneur Cum
Enterprise Development
Scheme (NEEDS)
https://www.dictiruchi.in/needs.pdf
4
Unemployed Youth
Employment Generation
Programme (UYEGP)
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
5
Annal Ambedkar Business
Champions Scheme (AABCS)
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
6
MSME Skill Training and
Employment Scheme
https://msmeonline.tn.gov.in/uyegp/pdf/uyegp_
go_66.pdf
7
Subsidy for Fund Raising from
SME Exchange
https://www.msmeonline.tn.gov.in/incentives/html_
cye_sme.php
8
Incentive for Patent
Registration/ Trade Mark
Registration / Geographical
Indications
https://www.msmeonline.tn.gov.in/incentives/html_
cye_ipr.php
9
Reimbursement of Stamp Duty
& Registration Charges
https://www.msmeonline.tn.gov.in/incentives/html_
cye_stamp.php
10 Pay Roll Subsidy
https://www.msmeonline.tn.gov.in/incentives/html_
cye_pay.php
11
Power Subsidy-
LTPT
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
12 Generator Subsidy
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
14
Subsidy for Fund
Raising
https://www.msmetamilnadu.tn.gov.in/new-schemes.
php
15
BACK - ENDED INTEREST
SUBSIDY
https://www.msmetamilnadu.tn.gov.in/beis.
php#:~:text=Back%2Dended%20interest%20
subsidy%20of,Fund%20Trust%20Scheme%20
(CGTMSE). Achieving Efficiencies in MSME Sector through Convergence of Schemes
Achieving Efficiencies in
MSME Sector Through
Convergence of Schemes
January 2026