Why in the News?
In January 2026, NITI Aayog released a report proposing convergence of MSME schemes to reduce duplication, improve efficiency and strengthen last mile delivery.
About the Report
- Title: Achieving Efficiencies in MSME Sector through Convergence of Schemes
- Prepared by Administrative Staff College of India
- Analyses 18 centrally administered MSME schemes
- Recommends information convergence and process convergence
- Focus on better coordination, outcomes and resource utilisation
Key Facts about MSME Sector
- GDP contribution about 29 to 30 percent
- Employment over 28.7 crore, second only to agriculture
- Share in exports about 45 to 46 percent
- Total MSMEs more than 6.3 crore
- Around 51 percent located in rural areas
- Government MSME budget increased sharply from 2019–20 to 2023–24, raising efficiency concerns
Why Convergence is Needed
- Multiple schemes with overlapping objectives
- Fragmented implementation across ministries
- High compliance burden for MSMEs
- Duplication of resources and limited outreach
- Weak translation of spending into outcomes
Framework for Convergence
- Information Convergence
- Integration of central and state government data
- Enables evidence based policymaking
- Improves coordination and governance
- Process Convergence
- Alignment and rationalisation of schemes
- Merging similar components
- Collaboration across ministries and states
- Creation of a unified MSME support ecosystem
| [2023] With reference to India, consider the following statements:
1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’, the ‘medium enterprises’ are those with investments in plant and machinery between Rs. 15 crore and Rs. 25 crore 2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 |
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