New Delhi, Jan 15 (UNI) A NITI Aayog report has recommended the convergence of multiple MSME support schemes to eliminate duplication and enhance efficiency, proposing the creation of a centralized AI-powered portal for the sector that contributes 29 per cent to India’s GDP.
The comprehensive study titled “Achieving Efficiencies in MSME Sector Through Convergence of Schemes,” prepared by the Administrative Staff College of India (ASCI), identifies significant overlaps among 18 central schemes currently operating with similar objectives.
The report, based on consultations with 98 stakeholders across six cities including Mumbai, Lucknow, Chennai and Hyderabad, reveals that approximately 70 per cent of MSMEs remain unaware of available government schemes despite the sector employing over 28.7 crore individuals.
The study proposes merging the Scheme of Fund for Regeneration of Traditional Industries (SFURTI), which receives Rs 362 crore annually, with the Micro and Small Enterprises Cluster Development Programme (MSE-CDP) allocated Rs 410 crore. Both schemes focus on cluster-based development but operate independently.
A unified Marketing Assistance Wing is recommended by converging the Procurement and Marketing Support (PMS) and International Cooperation (IC) schemes to provide integrated domestic and international market support to MSMEs.
The report calls for a three-tiered skill development framework merging overlapping entrepreneurship training components from schemes like PMEGP, IC, and the Entrepreneurship and Skill Development Programme (ESDP).
Integration of the ASPIRE scheme focussed on agro-rural innovation with MSME Innovative as a special category, while maintaining dedicated budget allocation for traditional industries.
A staggering 86 per cent of participants identified scheme duplication as the most significant barrier to effective participation, while 90 per cent reported never using digital portals for accessing government support.
In one instance, only one out of 39 associations at the Hyderabad workshop had utilized the Procurement and Marketing Scheme despite widespread eligibility, highlighting the awareness gap.
The proposed centralized portal would feature AI-driven chatbots, personalized scheme recommendations, integrated application tracking, and multilingual support. It would be modelled on international best practices from Canada’s BizPal and Singapore’s GoBusiness platforms.
Government spending on the MSME sector has increased from Rs 6,717 crore in 2019-20 to Rs 22,094 crore in 2023-24, making efficient resource utilization critical.
The report emphasizes that schemes serving specific beneficiary groups such as the National SC/ST Hub and NER MSME Promotion Programme should remain independent to prevent dilution of targeted support. Similarly, flagship programmes like PMEGP and PM Vishwakarma should maintain their standalone structure.
Several states have already implemented successful convergence models. Maharashtra’s alignment of its State Cluster Development Program with MSE-CDP has benefited over 12,000 small-scale industries, while Telangana’s TG-iPASS single-window system has attracted 22,745 industries.
The report proposes phased implementation over 18 months beginning with strategic planning and stakeholder engagement, followed by pilot programs and full-scale rollout with continuous monitoring.
MSMEs currently contribute approximately 45 per cent to India’s exports. However, only 1.1 per cent of MSMEs registered on the Udyam Portal are engaged in export activities, indicating significant untapped potential.
The study acknowledges challenges including coordination complexity across multiple implementing agencies, risk of diluting targetted support, resistance to change from traditional artisans, and administrative disruptions during transition.
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which has approved guarantees worth Rs 4.24 lakh crore for over 1.1 crore beneficiaries since inception, received an additional corpus of Rs 9,000 crore in FY 2023-24.
Approximately 3.94 crore MSMEs are registered on the Udyam Registration Portal, with another 2.71 crore informal micro enterprises registered on the Udyam Assist Platform launched in January 2023.
