States unfurl innovative MSME schemes, but medium enterprises seek more tailored aid

As India’s micro, small, and medium enterprises (MSMEs) continue to be a vital engine for economic growth, contributing significantly to the GDP, exports, and employment, several states are rolling out pioneering initiatives to bolster this crucial sector.From Maharashtra’s comprehensive schemes covering all MSME categories to Telangana’s tech-driven single-window clearances, regional governments are demonstrating a commitment to fostering a vibrant entrepreneurial ecosystem.However, a deeper look reveals a pressing need for policies specifically designed to address the unique challenges of medium-sized enterprises, as per a report by Administrative Staff College of India (ASCI), supported by NITI Aayog.While a plethora of schemes exist, the report, ‘Designing a Policy for Medium Enterprises,’ highlights that the majority of these, and a significant portion of allocated funds, tend to favour micro and small enterprises, potentially leaving medium-sized businesses in a policy gap.This segment, crucial for scaling up, innovation, and global competitiveness, often requires more substantial and specialised support than what is currently broadly available.Spotlight on state-level best practices:Several states have been recognised for their proactive and innovative approaches to MSME development:
Maharashtra stands out by extending all eight of its MSME-related schemes to medium enterprises, offering a wide array of incentives, including capital and investment subsidies, marketing assistance, and stamp duty reimbursements. A notable initiative is its Women Policy 2024, aimed at promoting entrepreneurship among women.
Tamil Nadu features schemes like a back-ended interest subsidy providing a 3% interest subvention on term loans for technology upgrades for MSMEs. Its Plots/Sheds Allotment Policy, 2016, facilitates MSMEs in acquiring industrial spaces through a transparent process.
Uttar Pradesh has a significant 84% of its 19 MSME schemes applicable to medium enterprises, including the flagship One District One Product (ODOP) scheme, which provides training and toolkits to artisans. The PLEDGE scheme encourages the development of private industrial parks with substantial land reservation for MSMEs and stamp duty exemptions.
Gujarat makes all 16 of its MSME schemes accessible to medium enterprises, with unique offerings like Rehabilitation of Sick Enterprises and assistance for common environment infrastructure.
West Bengal’s Banglashree scheme offers a bundle of incentives for medium enterprises, including significant interest and SGST subsidies, and waivers on electricity duty.
Telangana champions ease of doing business with its TG-iPASS system, a single-window clearance promising approvals typically within 15 days. The state also has targeted initiatives like T-Pride for SC/ST entrepreneurs and is piloting innovative revenue-based financing for MSMEs.
Despite these commendable efforts, the overarching sentiment from the report suggests a disparity. Medium enterprises, which form a critical bridge between small businesses and large corporations, contribute substantially to exports and innovation but often find existing support mechanisms either not applicable or insufficient for their higher working capital needs and technological advancement requirements.ALSO READ | The Middle Path: NITI Aayog’s 6 ideas to boost medium enterprisesThe call is for more focused interventions, including dedicated financing for working capital, enhanced support for technology integration like Industry 4.0, and robust R&D ecosystems specifically for medium-scale operations.As India aims to further strengthen its industrial backbone, the evolution of state and central policies to specifically nurture the growth and competitiveness of its medium-sized enterprises will be paramount.
ALSO READ | MSMEs need better tech infrastructure to compete, says ASCI report(Edited by : Shoma Bhattacharjee)First Published: May 28, 2025 12:49 AM IST

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