MSME funding: Five schemes for entrepreneurs for technology advancement in business

The Ministry of Micro, Small and Medium Enterprises, Government of India, offers various schemes to entrepreneurs to boost their business and grow by adopting new technologies. SMBStory lists five such schemes.

Micro, Small, and Medium Enterprises (MSMEs) play a vital part in the growth of an economy, which is why the government offers various schemes for entrepreneurs to boost their business and grow, especially by adopting new technologies.


In 2019, Niti Aayog had also organised a workshop to discuss regulatory and financial concerns relating to the adoption of Artificial Intelligence (AI) and automation technology by MSMEs.


Currently, around 6.5 crore micro, small and medium enterprises (MSMEs) contribute 30 percent to the GDP. While addressing a workshop at the Mahatma Gandhi International Hindi University at Wardha in Maharashtra earlier this year, the Union Minister for MSMEs, Nitin Gadkari, said that the government aims to increase the MSME sector's share in the GDP to 40 percent to benefit the rural poor.

Moreover, the COVID-19 pandemic has made MSMEs be more aware that the sector needs to adopt digital means in order to survive and thrive.


We at SMBStory have compiled a list of five technology upgradation schemes offered by the government. Read them here -  

Technology and Quality Upgradation Support to MSMEs

Entrepreneurs generally face difficulty in upgrading their technology and quality due to a lack of subject-matter expertise. This scheme advocates the use of Energy Efficient Technologies (EETs) in manufacturing units so as to reduce the cost of production and adopt a clean development mechanism.


The scheme focuses on enhancing MSMEs competency through Energy Efficiency and Product Quality Certification. 

It also encourages MSMEs to acquire product certification and licenses from national and international bodies. This scheme has the support of Small Industries Development Bank of India (SIDBI), banks and other financial institutions.


A funding support of up to 75 percent for awareness programmes is provided by the government, subject to a maximum of Rs 75,000 per programme.

Design clinic for design expertise

This scheme, an initiative of the MSME Ministry and the National Institute of Design (NID), is for increasing MSMEs' competency through the adoption of design and its learnings. The government provides funding support of Rs 60,000 per seminar, and 75 percent subject to a maximum of Rs 3.75 lakhs per workshop.


The government's contribution is 75 percent for micro, and 60 percent for SMEs for the project range between Rs 15 lakh and Rs 40 lakh. 

Lean manufacturing competitiveness for MSMEs

The objective of this scheme is to enhance the manufacturing competitiveness of MSMEs, improve their efficiencies, reduce waste management, etc., through the application of various Lean Manufacturing (LM) techniques.


A financial assistance is provided for implementation of lean manufacturing techniques, primarily the cost of lean manufacturing consultants (80 percent by the government, and 20 percent by beneficiaries).


The scheme is available for all enterprises that fall under the definition of MSMEs according to the MSME Act. 

National manufacturing competitiveness programme (NMCP)

This MSME scheme aims at facilitating technology upgradation and enhance global competitiveness by providing 15 percent upfront capital subsidy to MSMEs, including tiny, khadi, village, and coir industrial units on institutional finance availed by them for induction of well-established and improved technologies in specified sub-sectors/products approved under the scheme.


The programme was launched under the guidance of National Manufacturing Competitiveness Council.

ISO 9000/ISO 14001 certification reimbursement

This scheme provides incentives to those SMEs/ancillary undertakings that have acquired ISO 9000/ISO 14001/HACCP certification.


The scheme is enlarged so as to include reimbursement of expenses in the acquisition of ISO 14001 certification. The scheme envisages reimbursement of charges incurred for acquisition of ISO-9000/ISO-14001/HACCP certification to the extent of 75 percent of expenditure, subject to a maximum of ₹75,000 in each case.

Edited by Anju Narayanan


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