- For millions of SMEs, the distance between a scheme on paper and a loan in hand remains the only distance that matters.
- Minister’s directive to stakeholders was structured around five core pillars: technology access, credit and finance, skill development, market access, and quality support infrastructure.
India’s MSME Minister Jitan Ram Manjhi has made an emphatic call to banks and financial institutions to widen the credit pipeline for micro, small and medium enterprises (MSMEs), urging all stakeholders to move beyond rhetoric and ensure the effective, on-ground implementation of flagship government schemes designed to fuel the sector’s growth.
The minister’s appeal came during a two-day visit to Puducherry, where he conducted a thorough review of the MSME Ministry’s key programmes in the Union Territory.
Speaking to reporters after the review, Manjhi underscored the sheer economic weight of the sector, noting that MSMEs contribute an impressive 31.1 per cent to India’s GDP and serve as the “second backbone” of the country’s economic growth.
A five-pillar push
The minister’s directive to stakeholders was structured around five core pillars: technology access, credit and finance, skill development, market access, and quality support infrastructure. This comprehensive framework signals that the government views the MSME challenge as multidimensional — one that cannot be solved by credit alone, but certainly cannot be solved without it.
On the first day of the visit, Manjhi inspected the MSME Technology Centre in Puducherry, where he reviewed the centre’s training and production facilities and interacted with staff and trainees.
The Technology Centre, part of a nationwide network, plays a pivotal role in equipping small entrepreneurs with the technical know-how required to compete in an increasingly digitised and automated manufacturing landscape.
Credit conundrum
Manjhi’s urgent call to banks must be understood against the backdrop of India’s staggering MSME credit gap. Industry estimates peg the unmet credit demand in the sector at approximately Rs20–30 lakh crore, with only around 16 per cent of the country’s 6.4 crore MSMEs having access to formal credit.
The minister’s exhortation is not merely a policy suggestion — it is an acknowledgement of a structural bottleneck that has long constrained the sector’s potential.
Banks have historically been reluctant to lend to smaller enterprises, citing a lack of collateral, inadequate credit histories, and the perceived riskiness of the segment.
Government-backed schemes such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the Emergency Credit Line Guarantee Scheme (ECLGS), and the Pradhan Mantri Mudra Yojana (PMMY) were designed precisely to bridge this trust deficit, yet awareness and uptake remain uneven across states and Union Territories.
The Puducherry review
The comprehensive review meeting chaired by Manjhi brought together a broad spectrum of stakeholders.
Officials from the MSME Ministry, the Puducherry government, the Development and Facilitation Office, the Khadi and Village Industries Commission (KVIC), the Coir Board, the National Small Industries Corporation (NSIC), and the Small Industries Development Bank of India (SIDBI) were all present . Crucially, the meeting also included members of the State Level Bankers’ Committee (SLBC), MSME associations, and other industry representatives — ensuring that the discussion bridged the gap between policymakers and practitioners.
“Discussions were focused on improving awareness and greater uptake of these schemes,” an official statement noted. The presence of the SLBC members was particularly significant, as the committee serves as the primary coordination mechanism between banks and the government at the state level.
The visit also carried political symbolism: Manjhi called on Puducherry Chief Minister N. Rangasamy during his stay, with discussions touching upon MSME support and loan processing in the Union Territory.
Growing drumbeat from the centre
Manjhi’s Puducherry visit is part of a broader, sustained push from the Centre to elevate the MSME agenda. The ministry’s annual report for 2025–26 outlines a range of schemes providing credit support, technological assistance, infrastructure development, and skill training.
As of June 2026, the government’s cluster development scheme alone had approved 612 projects aimed at enhancing productivity and technology access. Earlier in the year, Manjhi had inaugurated the Centre for Rural Enterprise Acceleration through Technology (CREATE), further signalling the ministry’s intent to marry traditional enterprise with modern tools.
Budget 2026 has reinforced this direction, with an Rs53.47 lakh crore outlay emphasising infrastructure, manufacturing, and MSME support. The political messaging is consistent: MSMEs are no longer a peripheral concern but central to India’s ambition of becoming a developed economy.
