Centre Considers Raising MSME Champions Scheme Outlay To Rs 10,000 Crore

New Delhi, Jan 20 (KNN) The Centre is considering raising the MSME Champions Scheme outlay to about Rs 10,000 crore over the next five years, a sharp increase from Rs 1,125 crore in FY22–FY26, to promote cleaner manufacturing, boost exports and improve MSME global competitiveness.

An official said the proposed outlay may be increased to Rs 8,000–10,000 crore and has reached the Expenditure Finance Committee (EFC) stage, chaired by Expenditure Secretary V. Vualnam. Following EFC clearance, the proposal will be sent to the Cabinet for final approval, reported The Mint.

Approval Process May Take Up to Five Months

Another official said the EFC and Cabinet approval process may take three to five months. The MSME ministry is seeking a higher allocation after industry consultations highlighted the need for greater support for cleaner, more efficient manufacturing to stay globally competitive.

Budget documents show the MSME Champions scheme received Rs 875 crore in FY22, followed by much smaller allocations of Rs 52 crore in FY23, Rs 80 crore in FY24, and Rs 55 crore each in FY25 and FY26. Despite its strategic importance, utilisation during the current plan period has remained modest.

The India SME Forum said that of India’s 74 million MSMEs, only about 173,000 are exporters, though they contribute nearly 45 percent of total exports. Udyam portal data shows registered MSMEs have risen from 58 million in the past year, signalling rapid formalisation but still limited export participation.

MSMEs remain exposed to global headwinds, including US tariff actions, which have dampened business confidence. SIDBI’s business sentiment surveys for the first and second quarters of FY26 indicate a cooling of optimism, with firms reporting operational disruptions.

Experts Flag Uneven Impact Across MSMEs

Experts said the higher outlay could support micro and small enterprises but may offer limited gains for medium firms. Gurudas Nulkar of the Gokhale Institute noted that many medium enterprises already adhere to zero-defect and lean manufacturing standards within large supply chains, limiting scope for standalone IP creation. 

He added that IP development remains a key challenge for MSMEs, especially micro units, due to constraints in talent and R&D resources.

Certification Gaps Persist

India SME Forum President Vinod Kumar said only a small share of MSMEs currently hold the certifications needed to meet strict export standards. 

Citing the EU’s Carbon Border Adjustment Mechanism, he noted that most firms lack the documentation to demonstrate sustainability compliance and need stronger support to secure intellectual property rights for global competitiveness.

(KNN Bureau)