With tighter monetary policy in the US, evolving trade norms, and a global push for resilient supply chains, Indian MSMEs are under pressure to become more competitive, compliant, and export-ready. Yet, the maze of overlapping schemes, multiple portals, and siloed interventions has turned policy abundance into an execution challenge.

Considering the significance of the sector and maintaining the growth momentum and support, Union Finance Minister Nirmala Sitharaman extended significant support to the MSMEs, announcing a ₹10,000 crore fund for the sector. 

As India pushes towards a $5 trillion economy, MSMEs will remain central to job creation, exports, and inclusive growth. The challenge is no longer just funding or policy intent, but delivery.

Challenges Without Convergence

A recent study by NITI Aayog suggests that the issue is not a lack of support, but too much of it, operating in isolation. This report suggests reorganising India’s MSME policies through “convergence.” 

Convergence is not about cutting schemes but making them work together in an efficient manner, and the framework rests on two pillars, including information and process.

The report suggests that integrating the data scattered across the central and state levels will improve targeting and reduce duplication. It also said that merging similar schemes or bringing them under one umbrella will help deliver services more efficiently while securing the core agenda of each initiative.

India has experimented with such models before — in digital governance, direct benefit transfers, and single-window clearance systems.

By unifying data systems and streamlining overlapping processes, we can amplify the impact of our schemes, reduce the administrative burdens, and ensure better access for MSMEs across the country

— Suman K. Berry, Vice Chairman, NITI Aayog

For MSMEs, this results in fragmented support — credit without technology, skills without market access, or infrastructure without finance — reducing the overall effectiveness of public expenditure in improving productivity and competitiveness.

Speaking to The Secretariat, Anil Bhardwaj, Secretary-General, Federation of Indian Micro, Small & Medium Enterprises, said that though the Ministry of MSME administers multiple schemes covering credit, skills, technology, marketing, innovation, and infrastructure, these interventions often operate in silos.

Slew Of Schemes

The Ministry of MSME offers around 18 schemes across credit, skill development, infrastructure creation, technology, and marketing. Apart from this, many other ministries also run parallel initiatives targeting the same enterprises.

This reflects strong policy intent, overlapping objectives, and fragmented implementation, often resulting in duplication of efforts, administrative inefficiencies, and low awareness among intended beneficiaries.

For many small entrepreneurs, especially in rural and informal settings, navigating these schemes remains daunting.

Overlapping schemes also impose a high transaction and compliance burden. Differing eligibility norms, documentation requirements, portals, and timelines make it difficult for micro and first-generation entrepreneurs to access benefits.

Consequently, scheme utilisation is skewed towards better-informed or relatively larger enterprises, while genuine micro and informal units remain underserved. From an industry standpoint, this duplication spreads resources thinly, limits scale, and weakens accountability, as schemes are measured by outlays and beneficiaries rather than outcomes such as growth, graduation, or export readiness.

Which Schemes Need Merger/Relook

• Micro and Small Enterprises–Cluster Development Programme (MSE-CDP) and the Scheme for Fund for Regeneration of Traditional Industries (SFURTI) both deal with cluster-based development.
• Merging of MSE-CDP and SFURTI aims at enhancing infrastructure and competitiveness and supports traditional industries, particularly in uncovered and aspirational districts.
• ASPIRE and MSME Innovate offer skill development and incubation support.

Industry leaders have sought one platform where MSMEs can discover relevant schemes based on their profile, apply using a common identity with pre-populated Udyam/GST/ITR data, track approvals in real-time, and receive proactive alerts.

MSMEs face ₹13-₹17 lakh annually in compliance costs, over 1,450 regulatory obligations, 48 registers to maintain, and inspections from 59 different types of inspectors. Time spent on documentation and follow-ups is time not spent on product development, customer acquisition, or operational efficiency

— Umang Shukla, Co-Founder and CEO, Edgistify

“Credit support is fragmented across five overlapping schemes — PMEGP, CGTMSE, SRI Fund, National SC-ST Hub, PM Vishwakarma — each with distinct eligibility criteria. This results in repetition of paperwork, multiple registrations, and delays,” he told The Secretariat.

How Will This Help?

• MSMEs do not seek more schemes, but coherence, convergence, and a clear pathway from survival to scale.
• If implemented well, convergence could turn India’s dense web of MSME programmes into a coherent support system.
• The convergence of schemes can address challenges such as fragmented support systems, limited outreach of schemes, and low awareness levels.

MSMEs are the primary growth engine and backbone of the Indian economy, contributing around 30% to the GDP and accounting for about 46% of exports.

The sector generates employment for over 28.7 crore individuals in the country. Its importance extends beyond numbers as these MSMEs drive inclusive growth, foster innovation, and provide livelihoods, particularly in rural areas where entrepreneurial spirit continues to thrive despite infrastructural challenges.