Year End Review 2025: Ministry of Micro, Small & Medium Enterprises

Source: PIB

Relevance:
General Studies Paper–III (GS–III)
(Indian Economy, Inclusive Growth, MSMEs, Employment generation, Government initiatives, Technology and innovation)

Important Keywords

For Prelims:

Artisan-centric livelihood framework (PM Vishwakarma); Technology-enabled MSME ecosystem (Digital MSME 2.0); Employment-linked enterprise promotion scheme (PMEGP); Credit risk-sharing mechanism for MSEs (CGTMSE); Digital commerce integration platform for MSMEs (ONDC); Equity and growth capital facility for MSMEs (SRI Fund); Performance-oriented MSME reform initiative (RAMP); Quality, innovation and competitiveness framework (MSME Champions);

For Mains:

Major achievements and policy initiatives of the Ministry of MSME during 2025; Contribution of MSMEs to employment generation, industrial growth and inclusive development; Key financial, technological and market-related challenges confronting MSMEs; Way forward for building resilient, competitive and globally integrated MSMEs.

Why in News?

The year 2025 witnessed significant and reform-oriented advances in India’s Micro, Small and Medium Enterprises (MSME) sector, strengthening its central role in job creation, inclusive growth, and balanced economic development.

MAJOR ACHIEVEMENTS AND INITIATIVES UNDER VARIOUS SCHEMES/PROGRAMMES DURING 2025:

MSME Sector: Strategic Importance

From a policy perspective, MSMEs are critical to:

Inclusive and employment-intensive growth
Strengthening domestic value chains
Enhancing export competitiveness
Advancing the goals of Atmanirbhar Bharat

Their contribution extends beyond economics, influencing social stability, rural livelihoods, and regional development.

Formalisation of MSMEs (2025)

Udyam Registration Portal

The Udyam Registration Portal, launched on 1 July 2020, was designed to simplify MSME registration and ensure seamless access to government schemes and benefits. The portal is:

Free of cost
Paperless
Fully digital

It significantly reduced procedural barriers and encouraged voluntary participation of enterprises in the formal economy.

Udyam Assist Platform (UAP)

To further deepen formalisation, the Ministry launched the Udyam Assist Platform (UAP) on 11 January 2023. Its primary objective is to bring Informal Micro Enterprises (IMEs) into the formal system and enable them to access Priority Sector Lending (PSL).

UAP serves as a critical bridge between:

Informal enterprises, and
Institutional credit and policy support mechanisms.

Extent of Formalisation

Between 1 July 2020 and 17 December 2025, more than 7.30 crore enterprises were brought under the formal framework:

4.37 crore enterprises registered on the Udyam Portal
2.92 crore enterprises covered through the Udyam Assist Platform

This large-scale registration drive represents one of the most comprehensive enterprise formalisation efforts undertaken in India.

Revised MSME Classification: Union Budget 2025–26

Recognising the need to allow MSMEs to grow without losing policy support, the Union Budget 2025–26 revised the investment and turnover thresholds for MSME classification. The revised definition came into effect from 1 April

Revised MSME Definition (₹ crore)

Enterprise	Investment (Old)	Investment (Revised)	Turnover (Old)	Turnover (Revised)
Micro	1	2.5	5	10
Small	10	25	50	100
Medium	50	125	250	500

Investment limits increased by 2.5 times
Turnover limits increased by 2 times

Access to Credit:

Prime Minister’s Employment Generation Programme (PMEGP)

Credit-linked margin money subsidy for new micro-enterprises in the non-farm sector.
Promotes self-employment and job creation, especially in rural and backward regions.
Combines bank credit + subsidy, lowering entry barriers for first-generation entrepreneurs.
Supports manufacturing and services, aiding rural economic diversification.
Multilingual applications (19 regional languages) improve inclusivity and outreach.
Contributes to poverty reduction, balanced regional development, and Atmanirbhar Bharat.

Credit Guarantee Scheme for MSEs (CGSMSE)

Enables collateral-free institutional credit to MSEs by sharing lender risk with government via Credit Guarantee Fund Trust for Micro and Small Enterprises.
Overcomes a key structural constraint of MSMEs: lack of collateral.
Enhanced guarantee cover (up to ₹10 crore) supports scaling and growth-oriented MSMEs.
Rationalised guarantee fees improve scheme sustainability and lender participation.
Inclusive provisions strengthen financial inclusion and social equity.

Infrastructure & Capacity Building

PM Vishwakarma Scheme

Launched to provide end-to-end support to traditional artisans and craftspeople across 18 trades.
Achieved 30 lakh beneficiary registrations within two years, reflecting strong grassroots outreach.
Focuses on skill upgradation, credit access, digital inclusion, tool modernisation and marketing support.
Large-scale collateral-free credit and toolkit distribution enhance productivity and income security.
Trade fairs and exhibitions strengthen market linkages, preserving traditional skills while integrating them into modern value chains.
Contributes to heritage-based livelihoods, inclusive growth, and rural non-farm employment.

Raising and Accelerating MSME Performance (RAMP) Scheme

World Bank–supported Central Sector Scheme to improve MSME access to markets, finance and technology.
Emphasises institutional strengthening at Centre and State levels and cooperative federalism.
Approval of State/UT-led proposals reflects a bottom-up, reform-linked funding approach.
Large MSME coverage indicates its role in systemic competitiveness and productivity enhancement.
Supports transition from scheme-based assistance to performance-based MSME growth.

Micro and Small Enterprises Cluster Development Programme (MSE-CDP)

Cluster-based approach to improve productivity, competitiveness and economies of scale.
Supports Common Facility Centres (CFCs), flatted factories and industrial estates.
High number of completed projects shows infrastructure-led MSME strengthening.
Enables shared technology, testing, and infrastructure, reducing individual enterprise costs.
Enhances regional industrial ecosystems and local employment.

Promotion of MSMEs in North Eastern Region & Sikkim

Addresses regional imbalance by supporting MSME infrastructure in NER & Sikkim.
Focuses on technology centres, industrial estates and tourism-linked MSMEs.
Strengthens manufacturing, R&D, packaging, skilling and innovation in a geographically constrained region.
Infrastructure support improves market connectivity and regional integration.
Aligns MSME growth with Act East Policy and balanced regional development.

Assistance in Procurement and Marketing

Public Procurement Policy for MSEs (2012)

Ensures assured market access by mandating 25% annual procurement from MSEs by Central Ministries/Departments/CPSEs.
Includes sub-targets: 4% SC/ST-owned and 3% women-owned MSEs; 358 items reserved exclusively for MSEs.
Actual procurement exceeded mandate in 2024–25 (43.58%), signalling effective demand-side support.
Strengthens MSME viability, scale, and predictability of demand, aiding formalisation and competitiveness.

Procurement & Marketing Support (PMS) Scheme

Expands market access via domestic trade fairs/expos; improves product visibility and buyer linkages.
2025–26: 225 events; 10,271 MSEs benefited—demonstrates scale and outreach.
IITF–2025 showcased MSMEs nationwide (292 stalls): strong women, SC/ST, PwD, GI and ODOP representation.
Recognition (“Empowering India” Silver Medal) reflects institutional push for inclusive market integration.

National SC–ST Hub (NSSH)

Builds capacity and entrepreneurship culture among SC/ST MSEs to meet the 4% procurement mandate.
Uses vendor development programmes, conclaves, and handholding to integrate SC/ST firms into CPSE supply chains.
Outcomes show sharp procurement value gains (37-fold since 2015–16)—evidence of targeted inclusion working.
Addresses structural barriers via skills upgradation, market linkages, and buyer sensitisation.

Access to Technology

MSME Champions Scheme

Umbrella scheme to modernise processes, reduce waste, and enhance global competitiveness of MSMEs.
Operates through three integrated components:
- ZED (Zero Defect Zero Effect): Improves quality, productivity, sustainability, and environmental compliance.
- LEAN: Promotes process efficiency, cost reduction, and operational excellence.
- Innovative (Incubation, Design & IPR): Encourages innovation, product design, and IP protection.

Innovative Component

Incubation: Network of 773 Host Institutes nurtures new ideas; Idea Hackathon 5.0 (2025) reflects scale of grassroots innovation.
Design: Collaboration with IISc, IITs, NITs integrates design thinking into MSMEs.
IPR: Patent, trademark, design and GI support strengthens technology ownership and market power.

ZED Certification

Large-scale certification across Bronze–Silver–Gold levels signals a shift towards quality-led MSME growth.
Enhances export readiness, buyer confidence, and sustainable manufacturing.

LEAN Scheme

Improves shop-floor practices and competitiveness, enabling MSMEs to integrate with global value chains.

Technology Centres & Infrastructure

Technology Centres (Tool Rooms) provide design, tooling, precision manufacturing, and testing support to MSMEs.
Support strategic sectors (defence, aerospace) and act as hubs for industry-ready skilling.
Expansion via Technology Centre & Extension Centre (TCEC) Scheme improves regional access to technology and advisory services.
Technology Centre System Programme (TCSP) modernises centres with World Bank support, strengthening advanced manufacturing capacity.
New and upgraded centres have directly supported MSME productivity and skilled manpower creation.

Skilling & Entrepreneurship Development

Entrepreneurship Skill Development Programme (ESDP) builds entrepreneurial and managerial capabilities at scale.
Assistance to Training Institutions (ATI) strengthens training infrastructure across ni-msme, KVIC, NSIC, MGIRI, Tool Rooms, and State EDIs.
Focus on Eastern India and North-East addresses regional skill gaps and enterprise readiness.

IT Initiatives & Cyber Security

Cyber Jagrit Bharat (Oct 2025) enhanced cyber hygiene and resilience among MSMEs and officials, with support from Indian Computer Emergency Response Team (CERT-In).
Addresses rising digital and financial cyber risks in MSME digitisation.

Data-Driven & Spatial Governance

Performance Smartboard improves transparency, monitoring, and evidence-based policymaking across MSME schemes.
Integration with PM Gati Shakti National Master Plan through GIS mapping of ~1 lakh assets enables:
- Better targeting and convergence of schemes
- Identification of infrastructure gaps
- Improved last-mile delivery and resource allocation

Promotion of Khadi Village Industries and Coir Sector

Khadi & Village Industries (KVI)

Promotion of KVI is central to rural employment, artisan livelihoods, and decentralised industrialisation.
Implemented through Khadi and Gramodyog Vikas Yojana (KGVY), a Central Sector Scheme with:
- Khadi Vikas Yojana (KVY): Promotion and development of Khadi
- Gramodyog Vikas Yojana (GVY): Promotion of village industries

Economic Performance (FY 2025–26, till 30.11.2025)

KVI Sales: ₹1,27,606 crore (↑ from ₹1,10,747 crore in FY 2024–25)
KVI Production: ₹85,072 crore (↑ from ₹76,018 crore in FY 2024–25)
→ Indicates revival, market expansion and rising demand.

Key Initiatives

Artisan income enhancement: Spinning wages raised; weaving wages increased by 20% (from 01.04.2025).
Market access: MoU between Khadi and Village Industries Commission (KVIC) and National Small Industries Corporation (NSIC) for a whole-of-government market ecosystem.
Khadi Mahotsav (Sept–Oct 2025): Nationwide promotion under Vocal for Local and Atmanirbhar Bharat.
Global outreach: Participation in North East India Festival, Seoul (2025) to internationalise the “Khadi India” brand.

Mains Linkage: Strengthens rural non-farm employment, artisan incomes, cultural economy and local manufacturing.

Coir Sector

Coir sector showed strong export-led and technology-driven growth in 2025.
Exports (Jan–Oct 2025): ₹5,260.77 crore, reflecting robust global demand.

Skill, Market & Technology Support

Skill upgradation: Training of 985 artisans, including 437 women, promoting women-led livelihoods.
Market promotion:
- 74 domestic promotional programmes
- Participation in 35 domestic & 6 international exhibitions
Entrepreneurship: Registration of 166 new exporters, expanding export base.

Innovation & Sustainability

- Technology development: 7 new machines/products (e.g., thin blended coir yarn spinning machine) for value addition and modernisation.
- Environmental positioning: Life Cycle Assessment with academic collaboration highlights eco-friendly advantages of coir over synthetics.
- International Cooperation: ₹633 lakh assistance to 151 beneficiaries for capacity building and global integration.

Achievements of Ministry’s Other Organisations

National Small Industries Corporation (NSIC)

Provides raw material credit support to MSMEs under the Raw Material Assistance (RMA) scheme by paying suppliers against Bank Guarantee, easing working capital constraints.
FY 2024–25: ₹8,479.91 crore credit support to 2,482 MSMEs.
Jan–Nov 2025: ₹7,841.42 crore (provisional) support to 2,440+ MSMEs, indicating sustained demand for institutional working capital.
NSIC Technical Services Centres (NTSCs) deliver job-oriented, industry-aligned skilling using conventional to hi-tech machinery.
Achieved record skilling outcomes with over 84,000 trainees trained in 2025, reflecting MSME skill demand.
Establishment of NTSC at Bodh Gaya strengthens regional skill infrastructure for the Magadh region, linking skilling with NSSH and procurement ecosystems.

Mains Linkage: NSIC strengthens MSME liquidity, skill readiness, and regional industrial capacity, directly supporting competitiveness and employment.

Mahatma Gandhi Institute for Rural Industrialization (MGIRI)

A national autonomous institute rooted in Gandhian principles, promoting self-sufficiency and sustainable rural industries.
Supports micro enterprises and artisans through product development, consultancy, incubation, machinery design, and technology dissemination.
Repositioning as a Centre of Excellence (CoE) for Rural Industrialisation approved, signalling a shift to high-impact institutional support.
Infrastructure augmentation (hostel/guest house) strengthens training and outreach capacity.
In 2025, MGIRI delivered large-scale skill programmes, developed new technologies and innovative products, and expanded outreach to remote regions (NE & Ladakh).

Mains Linkage: MGIRI anchors sustainable rural industrialisation, artisan empowerment, and region-specific technology solutions—key to inclusive growth.

National Institute for Micro, Small and Medium Enterprises (ni-msme)

Apex training, research, and policy support institution for MSMEs under the MSMED framework.
Focus areas include entrepreneurship development, IT training, programme evaluation, policy studies, and inclusion of the under-privileged.
In 2025, conducted extensive national training programmes and workshops, strengthening entrepreneurial and managerial capacity.
Initiated international training programmes with CIRDAP, marking India’s role in South–South cooperation in MSME development.

Bilateral Cooperation, New Initiatives & Major Events

Bilateral MoUs & International Engagements

MSME internationalisation strengthened through MoUs with Mauritius, Thailand, Slovakia and Malaysia, focusing on:
- Capacity building & expert exchanges
- Technology transfer & industrial partnerships
- Business missions, exhibitions and trade fairs
- Training and technical assistance
MoUs involving National Small Industries Corporation (NSIC) position Indian MSMEs within global value chains and promote enterprise-to-enterprise cooperation.
Engagements reflect India’s strategy of MSME-led economic diplomacy and South–South & Indo-Pacific cooperation.

India–Japan & India–Taiwan MSME Cooperation

5S & Kaizen Programme (Japan):
- Certification of Indian trainers enhances manufacturing efficiency, quality culture and shop-floor competitiveness.
India–Japan MSME Joint Working Group (JWG):
- Platform under Industrial Competitiveness Partnership to align technology, skilling and productivity roadmaps.
India–Taiwan MSME JWG:
- Focus on technology collaboration, SME innovation and future roadmap, reinforcing East Asian MSME integration.

Other Major Initiatives & Events

MSME Hackathon 5.0 (2025)

Promotes smart and sustainable MSMEs through innovation-led growth.
Supports technology adoption, product design and business strategy with financial assistance up to ₹15 lakh.
Large participation indicates strong innovation potential at grassroots level.

Online Dispute Resolution (ODR) Portal

Addresses delayed payments to MSEs, a chronic MSME constraint.
Provides low-cost, digital, end-to-end dispute resolution, improving ease of doing business and trust in formal systems.

Yashasvini Campaign

- Targets gender parity in MSME formalisation and women-led enterprise visibility.
- Enhances awareness and registration of women-owned MSMEs, supporting inclusive entrepreneurship and procurement equity.

Major Outreach & Conclaves

PM Vishwakarma & National SC–ST Hub Mega Conclave (2025)

Showcases artisans’ livelihood transformation and inclusive entrepreneurship.
MoUs with design and management institutions strengthen design thinking, capacity building and rural livelihoods.

MSME Seva Parv – 2025 (Virasat se Vikas)

Integrates heritage, livelihoods and enterprise support.
Mass beneficiary engagement reinforces last-mile delivery, social inclusion and scheme awareness.

Special Campaign 5.0

Demonstrates good governance and sustainability through:
- E-waste disposal, office cleanliness, pendency reduction
- Revenue generation from scrap and space optimisation
Encourages Jan Bhagidari and environment-friendly administrative practices.

UPSC PYQ

Q. Consider the following statements with reference to India: (2023)

According to the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, medium enterprises are those having investment in plant and machinery between ₹15 crore and ₹25 crore.
All bank loans extended to Micro, Small and Medium Enterprises qualify under the priority sector.

Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer: B

CARE MCQ

Q. Consider the following components under the PM Vishwakarma Scheme:

Recognition through PM Vishwakarma Certificate and ID Card
Skill upgradation of artisans and craftspeople
Toolkit incentive support
Credit support and access to institutional finance
Incentive for digital transactions
Marketing support for products

Which of the components given above are included as benefits under the PM Vishwakarma Scheme?

1. 1, 2 and 3 only
2. 1, 3, 4 and 6 only
3. 1, 2, 3, 4, 5 and
4. 2, 4 and 5 only

Answer: C

Explanation

Statement 1: Correct – The scheme provides formal recognition through a PM Vishwakarma Certificate and ID Card to artisans.
Statement 2: Correct – Skill upgradation and training form a core pillar of the scheme.
Statement 3: Correct – Toolkit incentives are provided to enhance productivity.
Statement 4: Correct – Credit support is extended to enable access to affordable finance.
Statement 5: Correct – Incentives are given to promote digital transactions among beneficiaries.
Statement 6: Correct – Marketing support is provided to improve market access and income generation.