Govt Expands Support for MSMEs and Startups: Over 2.34 Lakh Enterprises Backed, 18.37 Crore Loans Sanctioned in 3 Years

The Startup India initiative, launched in 2016, continues to build a robust ecosystem for innovation through funding, policy support, and ease of doing business.

The Government of India has significantly scaled up support for micro, small and medium enterprises (MSMEs) and startups through a range of flagship schemes, benefiting millions of entrepreneurs and strengthening the country’s grassroots economy, the Ministry of MSME informed Parliament.

In a written reply in the Rajya Sabha, Minister of State for MSME Sushri Shobha Karandlaje highlighted key initiatives, including the Prime Minister’s Employment Generation Programme (PMEGP), Pradhan Mantri Mudra Yojana (PMMY), and Startup India, all aimed at promoting self-employment, easing access to credit, and fostering innovation.

PMEGP: Driving Rural Entrepreneurship and Job Creation

The Prime Minister’s Employment Generation Programme (PMEGP), implemented through the Khadi and Village Industries Commission (KVIC), continues to play a central role in promoting micro-enterprises, particularly in rural and semi-urban areas.

• 2.34 lakh micro enterprises supported over the last three years (FY 2022–25)

• Financial assistance is provided as a margin money subsidy on bank loans

• Focus on traditional artisans and unemployed youth

Eligibility and Key Features:

• Open to individuals aged 18 years and above

• Educational qualification required only for higher-value projects

• Maximum project cost:

  • ₹50 lakh (manufacturing)

  • ₹20 lakh (services)

• Approval timeline: 84 days from application to subsidy release

The scheme aims to generate sustainable employment at the local level, reducing migration and strengthening rural economies.

PM Mudra Yojana: 18.37 Crore Collateral-Free Loans

Launched in 2015, the Pradhan Mantri Mudra Yojana (PMMY) has emerged as a cornerstone of financial inclusion by offering collateral-free loans to small entrepreneurs.

• 18.37 crore loans sanctioned between April 2022 and March 2025

• Loan limit extended up to ₹20 lakh

• Available across manufacturing, trading, services, and allied agriculture sectors

Loan Categories:

• Shishu: Up to ₹50,000

• Kishor: ₹50,000 to ₹5 lakh

• Tarun: ₹5 lakh to ₹10 lakh

• Tarun Plus: ₹10 lakh to ₹20 lakh

The scheme is implemented through banks, NBFCs, MFIs, and regional rural banks, enabling wide reach across the country.

Startup India: Strengthening Innovation Ecosystem

The Startup India initiative, launched in 2016, continues to build a robust ecosystem for innovation through funding, policy support, and ease of doing business.

Key funding schemes include:

Fund of Funds for Startups (FFS):

• ₹12,362.70 crore committed

• ₹6,829.47 crore disbursed to AIFs (as of Jan 2026)

Startup India Seed Fund Scheme (SISFS):

• ₹945 crore approved

• ₹575 crore disbursed to incubators

Credit Guarantee Scheme for Startups (CGSS):

• ₹925.90 crore in loans guaranteed

These schemes support startups at various stages—from ideation to scaling—across sectors.

Addressing Credit Challenges for First-Time Entrepreneurs

To tackle common barriers such as lack of collateral and credit history, the government has introduced multiple measures:

• Collateral-free loans up to ₹20 lakh (as per RBI guidelines)

• Credit Guarantee Scheme (CGTMSE) with coverage up to ₹10 crore

• Guarantee coverage ranging from 75% to 90%

• Loan approval timelines capped at 14 working days for loans up to ₹25 lakh

These steps aim to bridge the funding gap and accelerate credit access.

Simplified Compliance and Strong Handholding Support

The government has also focused on easing processes and supporting entrepreneurs through:

• Awareness drives across States, including aspirational districts and the North-East

• PMEGP Helpdesks for real-time assistance

• Application support in 19 regional languages

• No educational qualification required for smaller projects

• Entrepreneurship Development Programmes (EDPs) and webinars

• Over 1,000 Model Project Reports available online

Initiatives like Startup Mahakumbh further provide networking and collaboration platforms for startups and investors.

Building an Inclusive Entrepreneurial Ecosystem

The combined impact of these schemes reflects a comprehensive strategy to:

• Promote self-employment and job creation

• Strengthen rural and urban micro-enterprises

• Foster innovation-driven growth

• Enhance financial inclusion

With sustained policy support and expanding access to capital, India’s MSME and startup ecosystem continues to emerge as a key driver of economic growth and employment generation.