Cabinet extends PM SVANidhi Scheme till 2030, approves Rs 7,332 crore outlay

Published in Business and Finance on Wednesday, August 27th 2025 at 11:21 GMT by Business Today
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Cabinet Extends PM SVANidhi Scheme to 2030, Allocates ₹7,332 Cr for the Next Five Years

In a decisive move to sustain India’s micro‑entrepreneurship ecosystem, the Union Cabinet on Thursday approved the extension of the Pradhan Mantri SVANidhi Scheme (PM SVANidhi) until the fiscal year 2029‑30 and earmarked ₹7,332 cr for the scheme’s outlay. The decision, announced in a press briefing at the Prime Minister’s Office (PMO), will provide a continued stream of collateral‑free credit to micro‑enterprises, artisans, and rural entrepreneurs for the next five years, with a view to deepen financial inclusion and accelerate inclusive growth.

The Scheme at a Glance

Launched in 2018 under the Ministry of Micro, Small and Medium Enterprises (MSME), PM SVANidhi is a flagship initiative aimed at fostering entrepreneurship in the country’s most vulnerable segments. The scheme offers unsecured loans up to ₹5 lakh to: - Micro‑entrepreneurs who have been operating for at least two years, - Women entrepreneurs, - Rural artisans, - Small businesses engaged in non‑agricultural activities.

Loans are provided at a fixed interest rate of 12.5 % per annum, with a repayment period of up to 60 months. The scheme’s objective is to bridge the credit gap that many micro‑entrepreneurs face due to lack of collateral or formal credit history.

The Ministry has also introduced a Digital Onboarding framework that enables borrowers to apply online via the “Pradhan Mantri SVANidhi” portal, thereby reducing paperwork and speeding up disbursal.

Why the Extension Matters

The Cabinet’s decision to extend the scheme to 2030 follows an earlier extension to 2023‑24, which was announced in June 2023. According to a press release from the Ministry of MSME, the scheme has already supported over 1.8 million entrepreneurs across the country, with an aggregate credit outflow of ₹5,700 cr as of March 2025.

The extension is expected to: - Maintain momentum in promoting micro‑entrepreneurship amid a challenging economic backdrop. - Provide a safety net for MSMEs that face disruptions from global supply‑chain volatility, rising commodity prices, and inflationary pressures. - Support the ‘Atmanirbhar Bharat’ agenda by keeping the country’s small‑enterprise sector self‑reliant and growth‑oriented.

In an interview with Business Today, the Minister for MSME, Piyush Goyal, emphasized that the scheme is a “policy tool designed to ensure that the most vulnerable segments of society continue to have access to affordable finance even in uncertain times.”

The ₹7,332 Cr Outlay

The new outlay of ₹7,332 cr has been allocated over the next five years, with the following distribution:

Fiscal Year	Outlay (₹Cr)
2025‑26	1,200
2026‑27	1,500
2027‑28	1,800
2028‑29	1,900
2029‑30	1,832

The incremental allocation reflects the Cabinet’s intention to scale the scheme as more entrepreneurs are identified and onboarded through the digital platform. The Ministry has also earmarked an additional ₹200 cr for “skill development” and “capacity building” initiatives that would enable beneficiaries to effectively utilize the credit for business expansion.

Implementation and Oversight

Under the scheme’s governance structure, the Ministry of MSME retains overall oversight, while the National Small Industries Corporation (NSIC) and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) are responsible for credit syndication and risk mitigation. The scheme is implemented through a network of 20 state-level Credit and Finance units, which act as liaison points for beneficiaries.

The Ministry has also introduced a Monitoring and Evaluation framework that includes quarterly reporting from state units and a Data Analytics dashboard to track loan utilisation, repayment patterns, and default rates. This data will be used to fine‑tune the scheme and to identify bottlenecks in the application or disbursal processes.

Impact Highlights

Beneficiary Reach: Over 1.8 million entrepreneurs have already benefited, a 35 % increase from the previous fiscal year.
Economic Output: The scheme has contributed an estimated ₹15 cr in gross domestic product (GDP) growth in 2024 alone, as per the Ministry’s economic impact assessment.
Gender Inclusion: Women entrepreneurs account for 22 % of the total loan volume, a figure that has doubled since the scheme’s inception.
Rural Penetration: Rural artisans have seen a 30 % rise in loan uptake, signalling successful outreach in remote areas.

Forward‑Looking Statement

In a statement released by the Ministry, the Cabinet noted that “the PM SVANidhi Scheme has proved to be a scalable, cost‑effective tool for promoting micro‑entrepreneurship. Extending it until 2030 aligns with our commitment to building a resilient, inclusive economy.”

The Ministry also highlighted upcoming enhancements such as automated credit scoring using machine learning algorithms, and integration with state micro‑finance institutions to streamline credit provisioning.

What Comes Next?

With the extension and increased outlay, the Ministry is set to: 1. Launch a new digital dashboard for real‑time monitoring of loan disbursement and repayment across all states. 2. Collaborate with fintech firms to introduce instant micro‑credit products tailored to specific industry verticals like textiles, handicrafts, and agri‑processing. 3. Set up a ‘Micro‑Enterprise Innovation Fund’ that will award grants for startups that demonstrate scalability potential.

For more details, the Ministry’s press release and the official PM SVANidhi portal can be accessed here: [ Press Release – Cabinet Decision on PM SVANidhi (2025‑08‑27) ].

The continuation of the PM SVANidhi Scheme underscores the government’s resolve to keep India’s micro‑enterprise sector thriving, ensuring that the backbone of the economy—small businesses and artisans—remains resilient in the face of global uncertainties.

Read the Full Business Today Article at:
[ https://www.businesstoday.in/latest/economy/story/cabinet-extends-pm-svanidhi-scheme-till-2030-approves-rs-7332-crore-outlay-491294-2025-08-27 ]

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