Achieving Efficiencies in MSME Sector through Convergence of Schemes: NITI Aayog

Syllabus: GS3/Economy

Context

• The NITI Aayog has released a report titled ‘Achieving Efficiencies in MSME Sector through Convergence of Schemes’, presenting a detailed framework to strengthen the effectiveness of government interventions in the MSME sector.

Need for Convergence of Schemes

• Avoid duplication and inefficiency: The Ministry of MSME currently oversees 18 schemes with overlapping objectives, leading to fragmented implementation and reduced outreach.
• Enhance efficiency and outcomes: Convergence simplifies access for beneficiaries, reduces administrative complexity, and ensures resources translate into measurable results.

Framework for Convergence (Two-pronged Convergence Model)

• Information Convergence: Integration of data across central and state levels to:
  • Enable informed policy decisions;
  • Improve inter-ministerial coordination;
  • Strengthen governance and monitoring
• Process Convergence: Streamlining scheme structures to:
  • Merge similar or overlapping programmes;
  • Combine common operational components;
  • Encourage collaboration across ministries and states

Key Recommendations

• Centralized Digital Portal: An AI-powered MSME portal integrating all schemes, compliance mechanisms, finance options, and market intelligence.
  • Features include unified access to scheme details, AI chatbots and dashboards for guidance, real-time mobile accessibility, and data-driven decision support.
• Cluster Development Scheme Integration: Proposes merging Scheme of Fund for Regeneration of Traditional Industries (SFURTI) with the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP).
  • Key elements include a dedicated sub-scheme for traditional industries, unified governance under MSE-CDP, and consolidated funding for scale and efficiency.
• Skill Development Convergence: Rationalisation of skill programmes into a three-tier structure:
  • Entrepreneurship and business management;
  • MSME technical and digital skills;
  • Training for rural and women artisans;
    • It enhances coordination, retains inclusivity, and promotes traditional and local crafts.
• Dedicated Marketing Assistance Wing: Creation of a Marketing Wing with two divisions:
  • Domestic Wing: Facilitating participation in trade fairs, buyer-seller meets, and national exhibitions.
  • International Wing: Supporting global market access through overseas trade fairs and B2B events.
• Integration of Innovation and ASPIRE Schemes: Integration of ASPIRE (A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship) into MSME Innovative to form a unified innovation framework for agro-rural enterprises.
  • Existing ASPIRE funds will continue, while future budgets will earmark a portion for rural incubation.
• Safeguarding Targeted Initiatives: The report emphasizes the preservation of focused programmes, including:
  • National SC/ST Hub;
  • Promotion of MSMEs in the North Eastern Region (NER);
  • PMEGP and PM Vishwakarma, which are to remain independent due to their scale and strategic importance.

Implementation Strategy and Governance

• The convergence strategy advocates a cautious and phased approach, merging schemes with overlapping objectives while maintaining the identity of flagship and targeted initiatives.
• Where mergers are not feasible, the report recommends:
  • Joint workshops for inter-ministerial coordination;
  • Shared capacity-building initiatives;
  • Continuous tracking of outcomes to ensure sustained impact;
• The overarching goal is to improve governance efficiency, reduce administrative burden, and maximize the economic contribution of India’s MSMEs.

Source: PIB