New Delhi: In a move aimed at strengthening India’s micro, small, and medium enterprises (MSMEs) sector, NITI Aayog has proposed the convergence of 18 government schemes spread across multiple ministries. The proposal, which seeks to streamline service delivery, reduce duplication, and enhance access for enterprises, comes as policymakers look for ways to make public support for MSMEs more effective and user-friendly.

The proposal is outlined in a report titled Achieving Efficiencies in MSME Sector through Convergence of Schemes, prepared by the Administrative Staff College of India (ASCI), Hyderabad, and released on Thursday by NITI Aayog member Arvind Virmani and Chief Executive Officer B.V.R. Subrahmanyam. The report reflects a growing recognition that while India has a robust framework of support for MSMEs, fragmentation across ministries and departments often limits the schemes’ impact.

According to the report, the Ministry of MSME currently operates 18 distinct schemes covering a wide range of interventions, including credit facilitation, skill development, infrastructure support, marketing assistance, innovation promotion, technology upgradation, and cluster development. While each scheme has contributed to enterprise growth in its own domain, the report notes that overlapping objectives, redundant processes, and fragmented implementation across different ministries have often resulted in inefficiencies and difficulties for beneficiaries.

“Effective convergence and rationalisation of schemes can simplify access for beneficiaries and ensure better use of public resources,” the report stated. It emphasized that MSMEs, particularly smaller and rural enterprises, face challenges in navigating the bureaucratic maze of multiple schemes, leading to missed opportunities and underutilization of resources.

Key Recommendations for Convergence

The report proposes a two-pronged convergence framework: information convergence and process convergence. Information convergence focuses on integrating data at central and state levels to improve coordination and enable evidence-based decision-making. By consolidating information on beneficiaries, fund utilization, and programme outcomes, policymakers and implementing agencies can track progress more accurately and identify gaps in support.

Process convergence, on the other hand, seeks to align similar schemes to reduce duplication and streamline service delivery. By harmonizing eligibility criteria, application processes, reporting standards, and monitoring mechanisms, the government can simplify access for MSMEs while improving administrative efficiency.

A central component of the proposed reforms is the creation of a unified digital platform for MSMEs. The portal would consolidate information on all schemes, compliance requirements, finance options, and market opportunities. The report suggests that the portal could leverage AI-enabled features such as dashboards, chat-based assistance, and mobile accessibility, enabling enterprises to access real-time support and guidance across multiple schemes. Such a platform would not only enhance transparency but also allow for proactive monitoring and targeted intervention by government agencies.

Sectoral and Scheme-Specific Convergence

The report identifies several areas where convergence could yield significant benefits. In cluster development, it recommends integrating the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) with the Micro and Small Enterprises–Cluster Development Programme (MSE-CDP). By combining planning, resource allocation, and monitoring efforts, the government can avoid overlap and optimize the deployment of financial and technical support to enterprise clusters.

Similarly, the report calls for a coordinated skill development framework for MSMEs. Currently, multiple ministries operate overlapping skill development programs with similar objectives. A unified framework would ensure a more structured, responsive, and targeted training approach, reducing duplication and improving the employability and productivity of the MSME workforce.

In the domain of marketing and export support, the report recommends the convergence of the Procurement and Marketing Scheme (PMS) with the International Cooperation (IC) scheme. This alignment would simplify access to marketing assistance for domestic and international markets, enabling MSMEs to participate more effectively in trade fairs, export promotion programs, and other market expansion initiatives.

Innovation-focused schemes are also targeted for integration. The report proposes merging the ASPIRE (A Scheme for Promotion of Innovation, Rural Industry & Entrepreneurship) initiative with the MSME Innovative scheme, positioning ASPIRE as a special category focused on agro-rural enterprises. This approach would consolidate resources and provide a clearer pathway for enterprises seeking funding, mentorship, and technical support for innovative projects.

Cautions Against Indiscriminate Merging

While the report advocates broad convergence, it also cautions against indiscriminate merging of schemes, particularly those designed for specific beneficiary groups. Schemes such as the National SC/ST Hub, which supports entrepreneurship among Scheduled Castes and Scheduled Tribes, and the MSME Promotion Programme for the Northeastern Region are highlighted as programs that require targeted, independent implementation to ensure equity and inclusion.

Large flagship programs like the Prime Minister’s Employment Generation Programme (PMEGP) and PM Vishwakarma are also recommended to remain independent. The report notes that these schemes have “substantial scale, distinct objectives, and focused economic benefits” that necessitate separate governance structures. Maintaining their independence ensures that their specific objectives—job creation, skill-based employment, and regional enterprise development—are not diluted through convergence.

Governance and Institutional Coordination

The report emphasizes the need for a coordinated governance framework to implement convergence effectively. It recommends joint planning among ministries, shared data systems, and coordinated outreach efforts to ensure that beneficiaries can access multiple schemes seamlessly. Regular inter-ministerial workshops, joint training programs, and common beneficiary mobilization efforts are suggested as tools to foster collaboration and harmonize objectives across departments.

In addition, the report encourages capacity-building initiatives for field officers and implementing agencies, ensuring they are familiar with the convergence framework and able to provide unified guidance to MSMEs. By fostering a culture of coordination and shared responsibility, the government aims to enhance the efficiency and impact of its MSME support ecosystem.

Expected Impact

The proposed convergence of MSME schemes is expected to yield multiple benefits. For enterprises, it simplifies access to financial, technical, and marketing support, reduces the administrative burden of applying to multiple schemes, and provides a single point of information and assistance. For the government, convergence promises more efficient resource allocation, reduced duplication of efforts, and improved monitoring and evaluation capabilities.

Experts say that a well-executed convergence framework could significantly improve the effectiveness of MSME policy interventions, particularly for micro and small enterprises that often struggle with awareness and access issues. A central digital portal, coupled with harmonized processes, could also serve as a real-time tool for policymakers to identify gaps, measure outcomes, and target interventions to high-potential sectors or regions.

Conclusion

NITI Aayog’s proposal for converging 18 MSME schemes reflects a broader shift in governance towards efficiency, transparency, and user-centric delivery of public services. By integrating information systems, aligning processes, and fostering inter-ministerial collaboration, the government seeks to make public support for MSMEs more coherent, accessible, and impactful.

While the report stresses caution in merging schemes targeted at specific groups or regions, the overarching goal is clear: to simplify the landscape of MSME support, optimize public resource utilization, and ensure that enterprises—particularly smaller and rural businesses—can access the assistance they need to grow, innovate, and contribute to India’s economic development.

If implemented, the convergence initiative could transform the MSME sector’s engagement with the government, creating a more integrated, efficient, and responsive ecosystem that better serves the needs of India’s entrepreneurial community.

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