Lok Sabha Question No. 1036 (UNSTARRED), answered on 2026-02-05
Subject: Support to MSMEs in Rural and Semi Urban Areas
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Suresh Kumar Shetkar

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1036 TO BE ANSWERED ON 05.02.2026

## SUPPORT TO MSMEs IN RURAL AND SEMI URBAN AREAS

## 1036. SHRI SURESH KUMAR SHETKAR:

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

- (a) whether the Government has taken any steps to ensure that first-time entrepreneurs in rural and semi-urban areas are not excluded from new Micro, Small and Medium Enterprises (MSMEs) credit instruments  due  to  stringent  compliance  requirements  and  if  so,  the  details  thereof  and  if  not,  the reasons that access remains skewed towards urban centres only;
- (b) whether targeted initiatives for footwear, leather, toys and food processing sectors under Budget are  backed by adequate infrastructure, skilling and market-linkage support to revive labour-intensive manufacturing; if so, the details thereof and if not, the reasons for persistent job losses in these sectors; and
- (c) whether the  Government has evaluated  the impact of  rising  imports  and trade  imbalances  on domestic  MSMEs  in  footwear,  toys  and  leather  sectors  and  has  aligned  Budget  interventions accordingly and if so, the details thereof and if not, the reasons for policy disconnect?

## ANSWER

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

- (a): The Government of India has taken a number of initiatives and measures to provide support to Micro, Small and Medium Enterprises (MSMEs), including first-time entrepreneurs in rural and semiurban areas, for improving access to finance. Some of them are:
- i. Ministry of MSME implements Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs)  through  Credit  Guarantee  Fund  Trust  for  Micro  and  Small  Enterprises  (CGTMSE)  to provide credit guarantee for loans extended to MSEs. The ceiling for guarantee coverage under the scheme is Rs 10 crore.
- 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 2000 crore to top up the Self-Reliant India Fund set up in 2021 to continue support to micro enterprises and maintain their access to risk capital.
- 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 Service 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 loans up to Rs. 3 lakh with interest subvention of max up to 8%.

(b) and (c): The Ministry of Micro Small and Medium Enterprises has taken various initiatives to revive  labour-intensive  manufacturing  including  footwear,  leather,  toys  and  food  processing  units. Some of these initiatives include Entrepreneurship and Skill Development Programme (ESDP) scheme, Procurement  and  Marketing  Support  (PMS),  Prime  Minister  Employment  Generation  Programme (PMEGP), Skill Upgradation and Mahila Coir Yojana, SCST Hub, Assistance to Training Institutions (ATI) Scheme, A Scheme for promotion of Innovation, Rural Industry & Entrepreneurship (ASPIRE) and training through Technology Centres set up across the country.

As informed by Department for Promotion of Industry and Internal Trade (DPIIT), the Indian Footwear, Leather Development Programme (IFLDP) is being implemented to support the growth of the leather and footwear sector by developing infrastructure, addressing sector-specific environmental concerns, promoting additional investments, generating employment, and boosting overall production capacity. IFLDP was approved in January, 2022 for Rs.1700 crores for 5 years (2021-26) to encourage development of infrastructure for the leather and footwear sector. Under the programme, 791 proposals have been approved and an amount of Rs.1,325 crore has been released so far.

As informed by Ministry of Food Processing Industries (MoFPI), "PM Formalisation of Micro food processing Enterprises (PMFME) Scheme" is being implemented for providing financial, technical and business  support  for  setting  up  of  new/  upgradation  of  micro  food  processing  enterprises  in  the country including rural and semi-urban areas. The scheme is demand driven and provides support of credit-linked grant of 35% of the eligible project cost, Common Infrastructure @ 35% of eligible cost upto  Rs.  3  crore,  seed  capital  of  up  to  Rs.  40,000,  capacity  building  for  beneficiaries,  branding  & marketing and handholding support for the formalization of units to all the interested applicants across the country.

In  addition,  the  Government,  inter-alia,  has  undertaken  the  following  initiatives  for  MSMEs impacted by trade imbalances:

- i. PM  Gati  Shakti  National  Master  Plan  enabling  comprehensive  and  integrated  planning  for multimodal logistics.
- ii. National Logistics Policy (NLP),  which  aims  to drive  economic  growth  and  business competitiveness of the country through cost-effective logistics network.
- iii. Credit Guarantee Scheme for Exporters (CGSE) for providing 100% credit guarantee coverage by  National  Credit  Guarantee  Trustee  Company  Limited  (NCGTC)  to  Member  Lending Institutions  (MLIs)  for  extending  additional  credit  facilities  up  to  Rs.20,000  crore  to  eligible exporters, including MSMEs.

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