Kurukshetra Magazine May 2025 | Monthly Yojana & Kurukshetra Magazine (English) - UPSC PDF Download

 Page 1


May, 2025
  
KURUKSHETRA
MICRO, SMALL & MEDIUM ENTERPRISES
Page 2


May, 2025
  
KURUKSHETRA
MICRO, SMALL & MEDIUM ENTERPRISES
  2 
   
CHAPTER 1- MSMES EMPOWERED BY SCIENCE AND TECHNOLOGY
Importance of MSMEs
• MSMEs (Micro, Small and Medium Enterprises) are crucial for economic growth, employment 
generation, export contribution, rural development, and inclusive growth in India.
• They enable equitable distribution of income and provide livelihood opportunities, especially in rural 
and semi-urban areas.
• There is a growing need to integrate MSMEs with scientific and technological advancements to convert 
publicly funded R&D into viable products and processes.
Science & Technology Interventions for MSMEs
• Government schemes provide MSMEs with resources in research, innovation, and technology, 
enhancing their global competitiveness and recognition.
• MSMEs are emerging as hubs of indigenous technological innovation in fields like energy-efficient 
electronics, electric bikes, drone technology, healthcare devices, and cleantech.
Key Science & Technology Initiatives
Common Research and Technology Development Hub (CRTDH)
• CRTDH, launched by Department of Scientific and Industrial Research (DSIR) in 2014-15, fosters 
innovation in MSME clusters by linking industry, academia, and government. It offers R&D 
facilities, testing labs, design centers, pilot plants, and prototype development. 
• Currently, 18 CRTDHs operate in sectors including electronics, renewable energy, affordable healthcare, 
environmental technology, and advanced materials, focusing on creating an ecosystem for innovation and 
commercialization.
CSIR Mega Innovation Complex for MSMEs
• The CSIR Mega Innovation Complex for MSMEs, established in Mumbai in January 2025 by CSIR, 
offers world-class incubation labs, technical support, scientific infrastructure, and networking 
spaces. It facilitates collaboration among MSMEs, startups, CSIR labs, deep-tech firms, and public 
research institutions, providing advanced scientific expertise and business development services.
NIDHI-Technology Business Incubator (NIDHI-TBI) Programme
• It was launched by the Department of Science and Technology under the NIDHI umbrella, supports 
high-risk, high-potential tech startups through incubators in educational and research institutions. 
• It provides infrastructure, mentorship, legal, financial, and IP consultancy to help startups rapidly 
commercialize innovations and create employment aligned with national priorities.
NIDHI-Inclusive Technology Business Incubator (NIDHI-ITBI)
• NIDHI-ITBI promotes innovation and entrepreneurship in emerging startup ecosystems, focusing on 
rural, tier-2, and tier-3 cities with an emphasis on social inclusion—women, geographical diversity, and 
differently-abled individuals. 
• It provides grants for proof of concept, prototyping, and early-stage development while building local 
innovation networks connecting academia, investors, and industry.
Page 3


May, 2025
  
KURUKSHETRA
MICRO, SMALL & MEDIUM ENTERPRISES
  2 
   
CHAPTER 1- MSMES EMPOWERED BY SCIENCE AND TECHNOLOGY
Importance of MSMEs
• MSMEs (Micro, Small and Medium Enterprises) are crucial for economic growth, employment 
generation, export contribution, rural development, and inclusive growth in India.
• They enable equitable distribution of income and provide livelihood opportunities, especially in rural 
and semi-urban areas.
• There is a growing need to integrate MSMEs with scientific and technological advancements to convert 
publicly funded R&D into viable products and processes.
Science & Technology Interventions for MSMEs
• Government schemes provide MSMEs with resources in research, innovation, and technology, 
enhancing their global competitiveness and recognition.
• MSMEs are emerging as hubs of indigenous technological innovation in fields like energy-efficient 
electronics, electric bikes, drone technology, healthcare devices, and cleantech.
Key Science & Technology Initiatives
Common Research and Technology Development Hub (CRTDH)
• CRTDH, launched by Department of Scientific and Industrial Research (DSIR) in 2014-15, fosters 
innovation in MSME clusters by linking industry, academia, and government. It offers R&D 
facilities, testing labs, design centers, pilot plants, and prototype development. 
• Currently, 18 CRTDHs operate in sectors including electronics, renewable energy, affordable healthcare, 
environmental technology, and advanced materials, focusing on creating an ecosystem for innovation and 
commercialization.
CSIR Mega Innovation Complex for MSMEs
• The CSIR Mega Innovation Complex for MSMEs, established in Mumbai in January 2025 by CSIR, 
offers world-class incubation labs, technical support, scientific infrastructure, and networking 
spaces. It facilitates collaboration among MSMEs, startups, CSIR labs, deep-tech firms, and public 
research institutions, providing advanced scientific expertise and business development services.
NIDHI-Technology Business Incubator (NIDHI-TBI) Programme
• It was launched by the Department of Science and Technology under the NIDHI umbrella, supports 
high-risk, high-potential tech startups through incubators in educational and research institutions. 
• It provides infrastructure, mentorship, legal, financial, and IP consultancy to help startups rapidly 
commercialize innovations and create employment aligned with national priorities.
NIDHI-Inclusive Technology Business Incubator (NIDHI-ITBI)
• NIDHI-ITBI promotes innovation and entrepreneurship in emerging startup ecosystems, focusing on 
rural, tier-2, and tier-3 cities with an emphasis on social inclusion—women, geographical diversity, and 
differently-abled individuals. 
• It provides grants for proof of concept, prototyping, and early-stage development while building local 
innovation networks connecting academia, investors, and industry.
   
   
Centre for Rural Enterprise Acceleration through Technology (CREATE)
• CREATE, established in Leh, promotes rural industrialization and MSME growth in challenging 
terrains like Ladakh by providing training and development for local products such as pashmina 
wool, essential oils, and bio-processing, aiming to improve productivity, quality, economic capacity, and 
livelihoods in remote areas.
Expansion of Technology Development Centers
• The Ministry of MSME runs 33 Technology Development Centers across sectors, aiding MSMEs in 
design, manufacturing, skill development, and access to advanced technologies. New centers are being 
developed under a Build-Operate-Transfer (BOT) PPP model to expand reach, offering services like 
job work, precision production, and specialized tool manufacturing.
Scheme for New Technology Centers and Extension Centers
• It aims to establish 20 Technology Centers and 100 Extension Centers on a hub-and-spoke model, 
bringing advanced technologies like AI, AR, VR, IoT, and Robotics to grassroots and remote areas.
• So far, 25 Extension Centers have been commissioned, training over 72,000 trainees and supporting 
1,440 MSMEs.
Overall Impact
• Science and technology interventions are enhancing MSMEs’ competitiveness, innovation, and global 
recognition by fostering an ecosystem that drives innovation, employment, rural upliftment, and 
inclusive growth. Consequently, the MSME sector is evolving from basic economic units into innovation 
hubs and key drivers of sustainable development in India’s economy.
CHAPTER 2- NAVIGATING THE FUTURE OF MSME FINANCES
Importance of MSMEs in the Economy
• MSMEs (Micro, Small, and Medium Enterprises) are vital to economic growth, acting as engines for 
multifaceted industrialization, especially in backward and rural regions.
• Globally, MSMEs constitute about 90% of businesses, generate 60-70% of employment, and contribute 
nearly 50% of GDP.
• In India, there are 6.23 crore registered MSMEs as of April 2025, employing 26.66 crore people.
• MSMEs contribute about one-third of India’s GDP and over 45% of exports.
• The sector spans multiple industries: food processing, textiles, auto components, hospitality, manufacturing 
(including space components for Chandrayaan).
• Around 70% of MSMEs are in services, with micro-enterprises dominating the sector.
Evolving Definition of MSME
• From April 1, 2025, MSME definitions were expanded, doubling turnover limits and increasing 
investment ceilings 2.5 times.
• Earlier classifications were based solely on investment; since 2020, MSMEs are defined using dual 
criteria: investment and turnover.
Page 4


May, 2025
  
KURUKSHETRA
MICRO, SMALL & MEDIUM ENTERPRISES
  2 
   
CHAPTER 1- MSMES EMPOWERED BY SCIENCE AND TECHNOLOGY
Importance of MSMEs
• MSMEs (Micro, Small and Medium Enterprises) are crucial for economic growth, employment 
generation, export contribution, rural development, and inclusive growth in India.
• They enable equitable distribution of income and provide livelihood opportunities, especially in rural 
and semi-urban areas.
• There is a growing need to integrate MSMEs with scientific and technological advancements to convert 
publicly funded R&D into viable products and processes.
Science & Technology Interventions for MSMEs
• Government schemes provide MSMEs with resources in research, innovation, and technology, 
enhancing their global competitiveness and recognition.
• MSMEs are emerging as hubs of indigenous technological innovation in fields like energy-efficient 
electronics, electric bikes, drone technology, healthcare devices, and cleantech.
Key Science & Technology Initiatives
Common Research and Technology Development Hub (CRTDH)
• CRTDH, launched by Department of Scientific and Industrial Research (DSIR) in 2014-15, fosters 
innovation in MSME clusters by linking industry, academia, and government. It offers R&D 
facilities, testing labs, design centers, pilot plants, and prototype development. 
• Currently, 18 CRTDHs operate in sectors including electronics, renewable energy, affordable healthcare, 
environmental technology, and advanced materials, focusing on creating an ecosystem for innovation and 
commercialization.
CSIR Mega Innovation Complex for MSMEs
• The CSIR Mega Innovation Complex for MSMEs, established in Mumbai in January 2025 by CSIR, 
offers world-class incubation labs, technical support, scientific infrastructure, and networking 
spaces. It facilitates collaboration among MSMEs, startups, CSIR labs, deep-tech firms, and public 
research institutions, providing advanced scientific expertise and business development services.
NIDHI-Technology Business Incubator (NIDHI-TBI) Programme
• It was launched by the Department of Science and Technology under the NIDHI umbrella, supports 
high-risk, high-potential tech startups through incubators in educational and research institutions. 
• It provides infrastructure, mentorship, legal, financial, and IP consultancy to help startups rapidly 
commercialize innovations and create employment aligned with national priorities.
NIDHI-Inclusive Technology Business Incubator (NIDHI-ITBI)
• NIDHI-ITBI promotes innovation and entrepreneurship in emerging startup ecosystems, focusing on 
rural, tier-2, and tier-3 cities with an emphasis on social inclusion—women, geographical diversity, and 
differently-abled individuals. 
• It provides grants for proof of concept, prototyping, and early-stage development while building local 
innovation networks connecting academia, investors, and industry.
   
   
Centre for Rural Enterprise Acceleration through Technology (CREATE)
• CREATE, established in Leh, promotes rural industrialization and MSME growth in challenging 
terrains like Ladakh by providing training and development for local products such as pashmina 
wool, essential oils, and bio-processing, aiming to improve productivity, quality, economic capacity, and 
livelihoods in remote areas.
Expansion of Technology Development Centers
• The Ministry of MSME runs 33 Technology Development Centers across sectors, aiding MSMEs in 
design, manufacturing, skill development, and access to advanced technologies. New centers are being 
developed under a Build-Operate-Transfer (BOT) PPP model to expand reach, offering services like 
job work, precision production, and specialized tool manufacturing.
Scheme for New Technology Centers and Extension Centers
• It aims to establish 20 Technology Centers and 100 Extension Centers on a hub-and-spoke model, 
bringing advanced technologies like AI, AR, VR, IoT, and Robotics to grassroots and remote areas.
• So far, 25 Extension Centers have been commissioned, training over 72,000 trainees and supporting 
1,440 MSMEs.
Overall Impact
• Science and technology interventions are enhancing MSMEs’ competitiveness, innovation, and global 
recognition by fostering an ecosystem that drives innovation, employment, rural upliftment, and 
inclusive growth. Consequently, the MSME sector is evolving from basic economic units into innovation 
hubs and key drivers of sustainable development in India’s economy.
CHAPTER 2- NAVIGATING THE FUTURE OF MSME FINANCES
Importance of MSMEs in the Economy
• MSMEs (Micro, Small, and Medium Enterprises) are vital to economic growth, acting as engines for 
multifaceted industrialization, especially in backward and rural regions.
• Globally, MSMEs constitute about 90% of businesses, generate 60-70% of employment, and contribute 
nearly 50% of GDP.
• In India, there are 6.23 crore registered MSMEs as of April 2025, employing 26.66 crore people.
• MSMEs contribute about one-third of India’s GDP and over 45% of exports.
• The sector spans multiple industries: food processing, textiles, auto components, hospitality, manufacturing 
(including space components for Chandrayaan).
• Around 70% of MSMEs are in services, with micro-enterprises dominating the sector.
Evolving Definition of MSME
• From April 1, 2025, MSME definitions were expanded, doubling turnover limits and increasing 
investment ceilings 2.5 times.
• Earlier classifications were based solely on investment; since 2020, MSMEs are defined using dual 
criteria: investment and turnover.
  4 
   
• The government simplified registration through Udyam Registration Portal (URP) and Udyam Assist 
Platform (UAP), making it easier for smaller enterprises to formalize.
• Formalization increased MSME registrations from 1.65 crore (April 2023) to 6.23 crore (April 2025).
• Top states with maximum MSME registrations include Maharashtra, Uttar Pradesh, and Tamil Nadu.
Strengthening MSMEs: Government Initiatives
• MSME growth depends on skill development, affordable finance, technology adoption, marketing, and 
infrastructure.
• The 2025 Budget enhanced MSME classification thresholds to prevent penalizing growth and to include 
larger enterprises in MSME benefits.
• This broadening promotes inclusivity, competitiveness, and growth.
MSME Finance Framework
• MSMEs are a key segment of Priority Sector Lending (PSL), with banks required to allocate 40% of 
Adjusted Net Bank Credit (ANBC) to PSL and 7.5% specifically to Micro Enterprises.
• RBI targets 20% year-on-year credit growth to MSEs and increased lending accessibility.
• Loans up to ?10 lakh to MSEs are collateral-free.
• RBI is considering a move to remove foreclosure charges on floating-rate loans to enable MSMEs to 
switch lenders and benefit from lower interest rates.
Credit Guarantee Scheme (CGS)
• CGS protects lenders from borrower defaults by providing guarantees via Credit Guarantee Fund Trust 
for Micro and Small Enterprises (CGTMSE).
• The guarantee limit increased from ?5 crore to ?10 crore from April 2025.
• Guarantee coverage varies: up to 90% for women-owned enterprises, 85% for SC/ST entrepreneurs, 
80% for enterprises in North-East and J&K, and 75% for others.
• Since 2000, CGS has given 71 lakh guarantees worth ?4.27 lakh crore; in just 2023-2025, 44 lakh 
guarantees worth ?5.02 lakh crore were given.
• The reduction of guarantee fees by 50% in 2023 greatly boosted scheme uptake.
Page 5


May, 2025
  
KURUKSHETRA
MICRO, SMALL & MEDIUM ENTERPRISES
  2 
   
CHAPTER 1- MSMES EMPOWERED BY SCIENCE AND TECHNOLOGY
Importance of MSMEs
• MSMEs (Micro, Small and Medium Enterprises) are crucial for economic growth, employment 
generation, export contribution, rural development, and inclusive growth in India.
• They enable equitable distribution of income and provide livelihood opportunities, especially in rural 
and semi-urban areas.
• There is a growing need to integrate MSMEs with scientific and technological advancements to convert 
publicly funded R&D into viable products and processes.
Science & Technology Interventions for MSMEs
• Government schemes provide MSMEs with resources in research, innovation, and technology, 
enhancing their global competitiveness and recognition.
• MSMEs are emerging as hubs of indigenous technological innovation in fields like energy-efficient 
electronics, electric bikes, drone technology, healthcare devices, and cleantech.
Key Science & Technology Initiatives
Common Research and Technology Development Hub (CRTDH)
• CRTDH, launched by Department of Scientific and Industrial Research (DSIR) in 2014-15, fosters 
innovation in MSME clusters by linking industry, academia, and government. It offers R&D 
facilities, testing labs, design centers, pilot plants, and prototype development. 
• Currently, 18 CRTDHs operate in sectors including electronics, renewable energy, affordable healthcare, 
environmental technology, and advanced materials, focusing on creating an ecosystem for innovation and 
commercialization.
CSIR Mega Innovation Complex for MSMEs
• The CSIR Mega Innovation Complex for MSMEs, established in Mumbai in January 2025 by CSIR, 
offers world-class incubation labs, technical support, scientific infrastructure, and networking 
spaces. It facilitates collaboration among MSMEs, startups, CSIR labs, deep-tech firms, and public 
research institutions, providing advanced scientific expertise and business development services.
NIDHI-Technology Business Incubator (NIDHI-TBI) Programme
• It was launched by the Department of Science and Technology under the NIDHI umbrella, supports 
high-risk, high-potential tech startups through incubators in educational and research institutions. 
• It provides infrastructure, mentorship, legal, financial, and IP consultancy to help startups rapidly 
commercialize innovations and create employment aligned with national priorities.
NIDHI-Inclusive Technology Business Incubator (NIDHI-ITBI)
• NIDHI-ITBI promotes innovation and entrepreneurship in emerging startup ecosystems, focusing on 
rural, tier-2, and tier-3 cities with an emphasis on social inclusion—women, geographical diversity, and 
differently-abled individuals. 
• It provides grants for proof of concept, prototyping, and early-stage development while building local 
innovation networks connecting academia, investors, and industry.
   
   
Centre for Rural Enterprise Acceleration through Technology (CREATE)
• CREATE, established in Leh, promotes rural industrialization and MSME growth in challenging 
terrains like Ladakh by providing training and development for local products such as pashmina 
wool, essential oils, and bio-processing, aiming to improve productivity, quality, economic capacity, and 
livelihoods in remote areas.
Expansion of Technology Development Centers
• The Ministry of MSME runs 33 Technology Development Centers across sectors, aiding MSMEs in 
design, manufacturing, skill development, and access to advanced technologies. New centers are being 
developed under a Build-Operate-Transfer (BOT) PPP model to expand reach, offering services like 
job work, precision production, and specialized tool manufacturing.
Scheme for New Technology Centers and Extension Centers
• It aims to establish 20 Technology Centers and 100 Extension Centers on a hub-and-spoke model, 
bringing advanced technologies like AI, AR, VR, IoT, and Robotics to grassroots and remote areas.
• So far, 25 Extension Centers have been commissioned, training over 72,000 trainees and supporting 
1,440 MSMEs.
Overall Impact
• Science and technology interventions are enhancing MSMEs’ competitiveness, innovation, and global 
recognition by fostering an ecosystem that drives innovation, employment, rural upliftment, and 
inclusive growth. Consequently, the MSME sector is evolving from basic economic units into innovation 
hubs and key drivers of sustainable development in India’s economy.
CHAPTER 2- NAVIGATING THE FUTURE OF MSME FINANCES
Importance of MSMEs in the Economy
• MSMEs (Micro, Small, and Medium Enterprises) are vital to economic growth, acting as engines for 
multifaceted industrialization, especially in backward and rural regions.
• Globally, MSMEs constitute about 90% of businesses, generate 60-70% of employment, and contribute 
nearly 50% of GDP.
• In India, there are 6.23 crore registered MSMEs as of April 2025, employing 26.66 crore people.
• MSMEs contribute about one-third of India’s GDP and over 45% of exports.
• The sector spans multiple industries: food processing, textiles, auto components, hospitality, manufacturing 
(including space components for Chandrayaan).
• Around 70% of MSMEs are in services, with micro-enterprises dominating the sector.
Evolving Definition of MSME
• From April 1, 2025, MSME definitions were expanded, doubling turnover limits and increasing 
investment ceilings 2.5 times.
• Earlier classifications were based solely on investment; since 2020, MSMEs are defined using dual 
criteria: investment and turnover.
  4 
   
• The government simplified registration through Udyam Registration Portal (URP) and Udyam Assist 
Platform (UAP), making it easier for smaller enterprises to formalize.
• Formalization increased MSME registrations from 1.65 crore (April 2023) to 6.23 crore (April 2025).
• Top states with maximum MSME registrations include Maharashtra, Uttar Pradesh, and Tamil Nadu.
Strengthening MSMEs: Government Initiatives
• MSME growth depends on skill development, affordable finance, technology adoption, marketing, and 
infrastructure.
• The 2025 Budget enhanced MSME classification thresholds to prevent penalizing growth and to include 
larger enterprises in MSME benefits.
• This broadening promotes inclusivity, competitiveness, and growth.
MSME Finance Framework
• MSMEs are a key segment of Priority Sector Lending (PSL), with banks required to allocate 40% of 
Adjusted Net Bank Credit (ANBC) to PSL and 7.5% specifically to Micro Enterprises.
• RBI targets 20% year-on-year credit growth to MSEs and increased lending accessibility.
• Loans up to ?10 lakh to MSEs are collateral-free.
• RBI is considering a move to remove foreclosure charges on floating-rate loans to enable MSMEs to 
switch lenders and benefit from lower interest rates.
Credit Guarantee Scheme (CGS)
• CGS protects lenders from borrower defaults by providing guarantees via Credit Guarantee Fund Trust 
for Micro and Small Enterprises (CGTMSE).
• The guarantee limit increased from ?5 crore to ?10 crore from April 2025.
• Guarantee coverage varies: up to 90% for women-owned enterprises, 85% for SC/ST entrepreneurs, 
80% for enterprises in North-East and J&K, and 75% for others.
• Since 2000, CGS has given 71 lakh guarantees worth ?4.27 lakh crore; in just 2023-2025, 44 lakh 
guarantees worth ?5.02 lakh crore were given.
• The reduction of guarantee fees by 50% in 2023 greatly boosted scheme uptake.
   
   
Key Schemes Supporting MSMEs
• Prime Minister’s Employment Generation Programme (PMEGP):
 ? Focuses on self-employment via micro-enterprises in non-farm sectors.
 ? Provides up to 95% bank finance with subsidies up to 35%.
 ? Assisted over 10 lakh enterprises, generating 83 lakh jobs.
• Pradhan Mantri Mudra Yojana (PMMY):
 ? Offers collateral-free loans for income-generating activities.
 ? Disbursed over 51.67 crore loans worth ?32.61 lakh crore since 2015.
• PM Vishwakarma Scheme:
 ? Launched in 2023 to support traditional artisans with skill upgradation, toolkits, digital incentives, 
and concessional loans.
 ? Nearly 30 lakh beneficiaries registered within 18 months; 4 lakh loans sanctioned.
 ? Offers loans up to ?3 lakh at concessional 5% interest, with government subvention.
• Self Reliant India Fund:
 ? Set up under Atmanirbhar Bharat with ?10,000 crore government contribution plus ?50,000 crore 
private equity.
 ? Provides equity support to growth-oriented MSMEs through venture capital.
Key Takeaways
• MSMEs are critical for inclusive growth, employment, and exports in India.
• Recent policy reforms have broadened the definition of MSMEs, enabling more enterprises to avail 
benefits.
• Access to affordable and collateral-free finance, combined with credit guarantees, is boosting MSME 
growth and formalization.
• Government schemes like PMEGP, PMMY, and PM Vishwakarma provide comprehensive support 
from credit to skill enhancement.
• Upcoming RBI guidelines on foreclosure charges can further improve credit flexibility for MSMEs.
• The expansion of the Credit Guarantee Scheme reflects the government’s commitment to easing 
financing constraints for MSMEs.
CHAPTER 3-TECHNOLOGY ADOPTION BY MSMES IN INDIA
Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in India’s economic landscape. With over 
4 crore enterprises employing nearly 18 crore people and contributing around 30% to the GDP and nearly 50% 
to exports, MSMEs are often termed as the engine of inclusive growth. However, despite their importance, 
the sector continues to struggle with technological backwardness, severely hampering their productivity, 
innovation, and global competitiveness.
Current State of Technology in MSMEs
The MSME technology ecosystem in India remains fragmented, underdeveloped, and underperforming. 
Many MSMEs operate with outdated machinery, lack in-house R&D capabilities, and are unable to