Lok Sabha Question No. 4409 (UNSTARRED), answered on 2026-03-19
Subject: Funds to Support Start-ups
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Eswarasamy K

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 4409 TO BE ANSWERED ON 19-03-2026

## FUNDS TO SUPPORT START-UPS

## 4409. SHRI ESWARASAMY K:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether  the  Government  has  established  a  Rupees  Ten  Thousand  crore  Fund  of  Funds  to expand support for start-ups and if so, the details thereof along with the funds disbursed and utilised in this regard so far, State-wise;
- (b) whether any new scheme has been launched to provide term loans up to Rupees Two crore for first-time  women,  Scheduled  Caste/Scheduled  Tribe  entrepreneurs  and  if  so,  the  total  number  of beneficiaries covered under it, State-wise; and
- (c) the measures taken by the Government to ensure accessibility of such funding and mentorship for entrepreneurs in Tier-II and Tier-III cities and to strengthen linkages with existing schemes such as Stand-Up India?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): In  the  Union  Budget  2026-27,  Government  announced  a  dedicated  Rs.  10,000  crore  SME Growth  Fund,  to  create  future  Champions,  incentivizing  enterprises  based  on  select  criteria.  The modalities of the announcement are being worked out.
- (b): In the Union Budget 2025-26, Government announced a new scheme targeting 5 lakh firsttime women, Scheduled Caste (SC), and Scheduled Tribe (ST) entrepreneurs, providing term loans up to Rs. 2 crore, to foster entrepreneurship, operating over the next five years. The modalities of the announcement are being worked out.
- (c): The  Government  has  taken  various  measures  to  improve  credit  penetration  and  reduce financial stress for new as well as existing MSMEs across the country, including in Tier-II and TierIII cities, which inter-alia includes:
- i. Credit  Guarantee  Scheme  (CGS)  for  Micro  and  Small  Enterprises  (MSEs)  implemented through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to provide credit  guarantee  for  loans  extended  to  MSEs  without  collateral  security  and  third-party guarantee. The ceiling for guarantee coverage is Rs. 10 crore under the scheme.
- ii. Self-Reliant India (SRI) Fund has been set up to infuse Rs. 50,000 crore as equity funding in MSMEs with a provision of Rs. 10,000 crore from the Government of India and Rs. 40,000 crore through Private Equity/Venture Capital Funds. The  Budget 2026-27 has also announced a support of Rs 2,000 crore to top up the SRI Fund set up in 2021 to continue support to micro enterprises.

- iii. Prime Minister's Employment Generation Programme provides Margin Money subsidy up to 35%, for setting up of new micro enterprises, in the non-farm sector with project cost of Rs. 50 lakh for Manufacturing and Rs. 20 lakh for Services enterprises.
- iv. PM  Vishwakarma  Scheme  was  launched  on  17.09.2023  to  provide  end-to-end  holistic support to artisans and craftspeople of 18 traditional trades who work with their hands and tools. The Scheme includes provision of collateral free loans up to Rs. 3 lakh with interest subvention of max up to 8%.
- v. As informed by DFS, Pradhan Mantri Mudra Yojana (PMMY) was launched on 08.04.2015 to  extend  collateral  free  credit  up  to  Rs.20  lakh  by  Member  Lending  Institutions.  Any individual, who is otherwise eligible to take a loan and has a business plan for small business enterprise can avail loan under  the scheme  for  income  generating  activities in the manufacturing, trading, service sectors including activities allied to agriculture.
- vi. As informed by Department for Promotion of Industry and Internal Trade (DPIIT), Startup India is an initiative by the Government of India that was launched on 16th January 2016, with intent  to  build  a  strong  ecosystem  for  nurturing  innovation,  startups  and encouraging investments in the startup ecosystem of the country. Under the Startup India initiative, the Government  is  implementing  three  flagship  Schemes,  Fund  of  Funds  for  Startups  (FFS), Startup India Seed Fund Scheme (SISFS), and Credit Guarantee Scheme for Startups (CGSS) to provide funding opportunities for startups across sectors at various stages of their business cycle.
- vii. As informed by RBI, in terms of para 4.1 (a) of RBI Master Direction - Lending to Micro, Small &  Medium  Enterprises (MSME)  Sector  dated July 24, 2017, all Scheduled Commercial Banks are mandated not to accept collateral security in the case of loans up to Rs.10 lakh extended to units in the MSE sector. As per RBI circular dated 9 th February 2026 , this limit stands increased to Rs. 20 lakh from 1 st April, 2026.
- viii. Further, Ministry of MSME,  through  its field offices, regularly organizes outreach programmes  in  coordination  with  MSME/  Industry  Departments  of  States/UTs  concerned and other stakeholders like CGTMSE, SIDBI, Banks, MSME Associations etc., to enhance credit availability among MSMEs.

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