Government Boosts Ease of Doing Business for MSMEs Nationwide

22 Dec 2025 CW Team

A key reform was the revision of MSME classification criteria in 2020, further updated with effect from April 1, 2025, to encourage technological upgradation, skill development and business scaling. To simplify compliance and formalisation, the Udyam Registration Portal was launched in July 2020, followed by the inclusion of retail and wholesale traders within the MSME ambit in July 2021. MSMEs undergoing an upward change in status are also provided non-tax benefits for three years to support smooth transition.

The government has expanded access to finance through multiple mechanisms. The Udyam Assist Platform, launched in January 2023, aims to bring informal micro enterprises into the formal system for availing priority sector lending. The Self Reliant India Fund provides equity support to MSMEs, while the Credit Guarantee Scheme enables collateral-free loans. An additional Rs 90 billion infusion into the CGTMSE corpus, announced in the Union Budget 2023–24, is expected to facilitate Rs 2 trillion of additional credit at lower borrowing costs.

During the pandemic, the Rs 5 trillion Emergency Credit Line Guarantee Scheme (ECLGS) supported businesses until March 2023. According to a State Bank of India report dated January 23, 2023, around 14.6 lakh MSME accounts—mostly micro and small enterprises—were prevented from turning non-performing.

Post-COVID relief was further extended through the Vivad se Vishwas I scheme, which provided refunds of performance securities and relief from penalties, benefiting over 60,000 MSME vendors. To strengthen market access, initiatives such as the MSME-SAMBANDH portal, Government e-Marketplace (GeM), vendor development programmes and targeted schemes for SC/ST and women entrepreneurs have been implemented, reinforcing transparency, inclusion and growth for MSMEs.

The Government of India has undertaken a series of policy, financial and digital initiatives to promote ease of doing business for Micro, Small and Medium Enterprises (MSMEs) and create a more enabling ecosystem for their growth and expansion.A key reform was the revision of MSME classification criteria in 2020, further updated with effect from April 1, 2025, to encourage technological upgradation, skill development and business scaling. To simplify compliance and formalisation, the Udyam Registration Portal was launched in July 2020, followed by the inclusion of retail and wholesale traders within the MSME ambit in July 2021. MSMEs undergoing an upward change in status are also provided non-tax benefits for three years to support smooth transition.The government has expanded access to finance through multiple mechanisms. The Udyam Assist Platform, launched in January 2023, aims to bring informal micro enterprises into the formal system for availing priority sector lending. The Self Reliant India Fund provides equity support to MSMEs, while the Credit Guarantee Scheme enables collateral-free loans. An additional Rs 90 billion infusion into the CGTMSE corpus, announced in the Union Budget 2023–24, is expected to facilitate Rs 2 trillion of additional credit at lower borrowing costs.During the pandemic, the Rs 5 trillion Emergency Credit Line Guarantee Scheme (ECLGS) supported businesses until March 2023. According to a State Bank of India report dated January 23, 2023, around 14.6 lakh MSME accounts—mostly micro and small enterprises—were prevented from turning non-performing.Post-COVID relief was further extended through the Vivad se Vishwas I scheme, which provided refunds of performance securities and relief from penalties, benefiting over 60,000 MSME vendors. To strengthen market access, initiatives such as the MSME-SAMBANDH portal, Government e-Marketplace (GeM), vendor development programmes and targeted schemes for SC/ST and women entrepreneurs have been implemented, reinforcing transparency, inclusion and growth for MSMEs.

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