NITI Aayog report flags overlaps in MSME schemes, pitches convergence to boost impact

Ministry of MSME runs 18 schemes covering areas such as credit, skills, technology, marketing, innovation and infrastructure

• NITI Aayog urges rationalisation of MSME schemes for better efficiency
• Report recommends a centralised AI-enabled digital platform for MSMEs
• Flagship schemes like PMEGP and PM Vishwakarma to remain independent

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India’s vast web of support schemes for micro, small and medium enterprises (MSMEs) needs rationalisation to improve efficiency and impact, NITI Aayog said in a new report that pushes for large-scale convergence of government programmes.

The report, titled Achieving Efficiencies in MSME Sector through Convergence of Schemes, was released in New Delhi on January 15 by NITI Aayog Member Arvind Virmani and Chief Executive Officer B V R Subrahmanyam.

In the report, NITI Aayog said it has reviewed existing central government schemes for MSMEs, examined the extent to which they already converge, and drawn lessons from state and international experiences. It said the exercise was aimed at improving efficiency and outcomes for the sector.

“The report evaluates existing government schemes and programmes for the MSME sector, assesses the current level of convergence among them, and identifies best practices from central, state and international experiences,” NITI Aayog said in a statement.

Too many schemes, too little coordination

The report notes that the Ministry of MSME alone runs 18 schemes covering areas such as credit, skills, technology, marketing, innovation and infrastructure. Several other ministries and states also operate parallel programmes with similar objectives.

The report says overlapping objectives and fragmented implementation across ministries have reduced efficiency and limited the reach of MSME schemes, and that better convergence can improve access and outcomes.

It adds that convergence should work at two levels – information and process. “Information convergence focuses on integrating government-generated data at the central and state levels to improve coordination, enable informed decision-making, and strengthen governance outcomes,” the report said, adding that “process convergence aims at aligning and unifying schemes to reduce redundancies, streamline operations, and improve service delivery.

Big push for a digital platform

One of the key recommendations is the creation of a centralised, AI-enabled digital platform for MSMEs. This would bring together information on schemes, compliance, finance and markets on a single portal.

The report says the platform should have modules for information, processes, compliance and market research, supported by dashboards, chatbots and mobile access.

Merging clusters, skills and innovation schemes

NITI Aayog has suggested merging the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) with the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP). It proposes a unified governance structure with a special sub-scheme for traditional industries.

On skills, the report recommends rationalising overlapping programmes into a three-tier structure covering entrepreneurship and business skills, technical skills for MSMEs, and training for rural and women artisans, while retaining targeted schemes for crafts and inclusion.

For marketing support, it proposes setting up a dedicated Marketing Assistance Wing with domestic and international arms to handle exhibitions, trade fairs, buyer-seller meets and support for global market access.

In innovation, the report suggests that ASPIRE – A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship – should be integrated into the MSME Innovative programme as a special category for agro-rural enterprises.

What will not be merged

While calling for convergence, NITI Aayog said flagship and socially sensitive schemes such as the National SC/ST Hub and programmes for the North Eastern Region should be protected. Large schemes like the Prime Minister’s Employment Generation Programme (PMEGP) and PM Vishwakarma should remain independent because of their strategic importance.

Where schemes cannot be merged, the report suggests stronger collaboration through joint workshops, shared training for administrators and coordinated implementation.

Transitions must be managed carefully so that beneficiaries are not disrupted and outcomes are tracked closely, the statement said. It also stressed the need to “safeguard beneficiary interests” during any restructuring.

Why it matters

The MSME sector is a major part of India’s manufacturing and entrepreneurship ecosystem.

The report says convergence can simplify access for beneficiaries and improve the translation of public resources into outputs and outcomes.