Govt pumps Rs 9,000 Cr into MSEs guarantee fund, rolls out new support measures

The Government of India has announced the infusion of Rs 9,000 crore into the corpus of the Credit Guarentee Fund Trust for MSEs (micro and small enterprises) to enable additional credit of Rs 2 lakh crore at a reduced cost of credit.

Announced under the Credit Guarentee Scheme (CGS) for MSEs of Ministry of MSME, the guarentee ceiling per enterprise has been increased from Rs 5 crore to Rs 10 crore.

The broad suite of reforms, unveiled in a written reply to Parliament by the Minister of State for MSMEs, is designed to ease access to finance, accelerate technology adoption, ensure timely payments, and streamline regulatory procedures for small businesses across the country.

To ensure timely payment settlements for MSEs, the SAMADHAAN portal was launched in 2017 for monitoring outstanding dues. As part of a broader package to support the MSME sector, the ministry said that 161 Micro and Small Enterprises Facilitation Councils have been established across states and union territories to fast-track resolution of dues owned to small businesses.

The government also underscored efforts to ensure timely payments and better cash flow for MSMEs. The existing Trade Receivables Discounting System (TReDS ) will now onboard corporates and central public sector enterprise with the turnover threshold lowered to Rs 250 crore, thus widening access for SMEs to electronically discount receivables.

Other support measures include subsidies under the Prime Minister's Employment Generation Programme for new micro-enterprises; interest-subvention loans under the PM Vishwakarma scheme for artisans and craftspeople; and equity funding via the recently established Self‑Reliant India Fund which is structured to inject up to Rs 50,000 crore into MSMEs, combining government and private equity/venture capital funds.

To ease regulatory friction, the ministry recalled the launch of the fully digital, paperless Udyam Registration Portal in 2020, since augmented by the Udyam Assist Platform (2023) that brings informal micro-enterprises into the formal fold, enabling them to access priority-sector lending.

Additionally, compliance burdens under the Public Procurement Policy for MSEs have been reduced, and the national single window system now seeks to simplify approvals by integrating clearance procedures across multiple ministries and state governments.