Published by Vashishth Academy — Leading Coaching Institute for UPSC, PCS & SSC Exams in Ludhiana
📰 Why in News?
India’s apex policy think tank, NITI Aayog, has proposed a dedicated loan scheme for Medium Enterprises (MEs) to address a major gap in credit access. The move is aimed at making funding more accessible and affordable for these critical contributors to India’s economy.
📌 This topic is important for UPSC Prelims, GS-3 Mains (Economy), State PCS, and SSC General Awareness.
🧩 Understanding Medium Enterprises in India
Medium enterprises fall under the MSME (Micro, Small, and Medium Enterprises) sector, but they are the least represented despite their high contribution to exports and jobs.
MSME Sector Composition:
| Category | % of Total MSMEs | Contribution to Exports |
|---|---|---|
| Micro | 97% | Low |
| Small | 2.7% | Moderate |
| Medium | 0.3% | ~40% of MSME exports |
🚧 Key Problems Faced by Medium Enterprises
📉 $10 Billion Funding Gap (2024 estimate)
💸 Interest rates are 4% higher than for large companies
🏦 Low inclusion in government schemes: Only 8 out of 18 MSME schemes support MEs
📊 Limited credit under Priority Sector Lending
🧾 NITI Aayog’s Key Recommendations
1. 🏦 Tailored Working Capital Loan Scheme
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Overall loan limit: ₹25 crore
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Limit per enterprise: ₹5 crore
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For: Manufacturing and services sector
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Supervision: Ministry of MSME
2. 💳 Medium Enterprise Credit Card
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Covers immediate needs like:
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Payroll
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Inventory
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Repair & maintenance
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Credit limit: ₹5 crore
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Flexible repayment options
3. ⏱️ Faster Bank Processing
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Use retail banks for quicker loan disbursement
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Supervised by MSME Ministry
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Reduce approval delays
📉 Other Challenges Identified in the Report
🔧 Low technology adoption
🔬 Minimal investment in R&D
🧪 Poor infrastructure for testing and certification
👨🏫 Skill development programs not aligned with ME needs
🧠 Digital Tools & Skill Development Suggestions
NITI Aayog recommends:
🖥️ A Dedicated ME Portal on Udyam
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AI-based assistance for schemes
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Compliance guidance
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Business-specific digital tools
📚 Customized Training Programs
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Sector-specific skill development
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Regional relevance for better uptake
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Promotes entrepreneurship & innovation
🚀 Why This Matters
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Medium Enterprises are engines of growth, job creation, and export enhancement.
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Without targeted support, India risks stalling one of its most productive economic segments.
📘 Exam Relevance (UPSC/PCS/SSC)
| Exam | Relevance |
|---|---|
| UPSC GS-3 | Indian Economy, MSMEs, Inclusive Growth |
| State PCS | Economic Reforms, Government Schemes |
| SSC | Current Affairs, Government Policies |
| EPFO/APFC | Industrial Policy, Financial Inclusion |
🔍 Important Terms to Remember:
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MSME classification (Investment & Turnover)
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Priority Sector Lending
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Udyam Registration Portal
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NITI Aayog’s role in policy-making
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Medium Enterprise Credit Card – NEW concept
✍️ Vashishth Academy Insight
At Vashishth Academy, Ludhiana’s most trusted institute for government exam preparation, we ensure our students stay updated with topics beyond headlines. Our dedicated Economy modules, current affairs classes, and GS test series cover such policy developments in depth.
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