New Delhi, Mar 12 (KNN) Highlighting the impact of Trump tariff on the country’s micro, small and medium enterprises (MSMEs), a parliamentary committee has recommended to develop an early-warning and real-time monitoring system to track global trade policy developments impacting MSMEs.
The Department-Related Parliamentary Standing Committee on Industry (Rajya Sabha) in its 333rd report on the Demands for Grants (2026–27) of the Ministry of MSMEs also proposed to design an MSME Tariff Resilience Package within RAMP (Raising and Accelerating MSME Performance) and PMS (Procurement and Marketing Support Scheme) with targeted working-capital support and market diversification towards EU, ASEAN, West Asia and Africa.
The panel also recommended to establish a dedicated MSME Trade Defence and Support Mechanism for legal, technical and advisory assistance.
As per the report, there are 7.61 crore MSMEs registered on the Udyam portal, with an overwhelming 7.56 crore (99.3 per cent) falling under the micro category, while only about 4.88 lakh are small and approximately 36,816 are medium enterprises.
The Parliamentary Panel Report reviewed budget allocations and flagship schemes of the scheme among others and gave its recommendations.
Budget Allocation Concerns
The Committee noted that the Budget Estimates (BE) 2026-27 for the Ministry stand at Rs 24,566.27 crore, comprising Rs 22,647.26 crore in revenue expenditure and Rs 1,919.01 crore in capital expenditure.
However, it flagged that Rs 9,000 crore — 36.6 per cent of the total outlay — has been provisioned under the Guaranteed Emergency Credit Line (GECL), despite actual GECL expenditure being nil in both FY 2024-25 and FY 2025-26, and the Emergency Credit Line Guarantee Scheme (ECLGS) having closed operationally on 31 March 2023.
“This ‘phantom allocation’ inflates headline numbers and masks the effective developmental outlay, which stands at approximately Rs 15,566 crore after excluding GECL,” the Committee remarked.
The Committee observed that the Revised Estimates (RE) for FY 2025-26 were barely 52.2 per cent of BE, and an extraordinary 76.53 per cent of total expenditure in FY 2023-24 was incurred in the last quarter alone, indicating persistent back-loaded spending and systemic weaknesses in expenditure planning.
The House panel noted with serious concern that of eight Budget 2025-26 announcements relevant to MSMEs, only two were operationalised.
It recommended to operationalise all pending MSME Budget announcements within six months, institute mechanism for periodic review and formally designate the Ministry as the nodal authority for MSME credit measures.
Issues Holding Micro Enterprise Scheme
The Committee said that its ground assessment during study visits revealed critical structural constraints pertaining to Prime Minister’s Employment Generation Programme (PMEGP).
It noted that the Rs 50 lakh project-cost ceiling for manufacturing is outdated and misaligned with current capital requirements. Further, bank rejection rates remain at 40–50 per thus holding back India’s largest micro enterprise scheme.
The Committee proposed to revise the project-cost ceiling upward from Rs 50 lakh with periodic indexation to inflation and expand eligibility beyond proprietary enterprises to include partnerships and other business forms. It called for expeditiously rolling out the PMEGP 2.0 single-window portal for end-to-end digital workflow and real-time tracking.
PM Vishwakarma
While noting some of the milestones achieved under the PM Vishwakarma scheme, the Committee said that its ground assessment found that early registration success has not yet translated into proportionate training, toolkit utilisation and credit outcomes.
The Committee expressed concern that trade nomenclature continues to use region-specific and caste-associated names (e.g. Naai, Charmakar, Kumhaar, Dhobi), which risks reinforcing occupational rigidities and has contributed to reluctance or non-adoption in some states.
The House panel recommended to urgently rationalise trade nomenclature by replacing caste- or region-associated terms with profession-neutral, function-based names (e.g. “Footwear Artisan” instead of “Cobbler”, “Ceramic and Clay Product Maker” instead of “Potter”, “Personal Grooming Service Provider” instead of “Barber”).
(KNN Bureau)
