MUDRA, PMEGP, CGTMSE, and Stand-Up India's closure

Three government schemes cover most of what a small business in India borrows or gets as a subsidy, and a fourth, Stand-Up India, is still often mentioned beside them though it has closed. They do quite different things. This lesson is each one on a page.

PM MUDRA Yojana — a collateral-free loan

For non-farm micro enterprises in manufacturing, trading, services and activities allied to agriculture. You borrow from any bank branch, regional rural bank, small finance bank, NBFC or microfinance institution, and you do not need collateral.

It comes in four sizes:

Tarun Plus is only for people who took a Tarun loan before and repaid it in full. If this is your first MUDRA loan, the most you can ask for is ₹10 lakh. MUDRA is not available to someone already in default on a loan.

PMEGP — a subsidy on a new unit

Not a loan by itself: a subsidy on part of the cost of setting up a new project, with a bank loan for most of the rest. It is not for an existing business or one that has already had a subsidy under another government scheme, and the project needs some capital spending. Trading projects are allowed, but each state may spend at most 10% of its yearly PMEGP money on them, so places run out.

• Largest project: ₹50 lakh for manufacturing, ₹20 lakh for services or trading.
• Above ₹10 lakh (manufacturing) or ₹5 lakh (services or trading), the applicant must have passed Class 8.
• The subsidy depends on who you are and where the unit is:

Special category includes women, SC, ST, OBC, minority, ex-servicemen, divyang and transgender applicants, and units in the North East, hill and border areas and aspirational districts. You put in 10% of the project cost yourself, or 5% in the special category.

Apply on the PMEGP portal, pmegp.msme.gov.in; KVIC, the state KVIB or the District Industries Centre then sends it to a bank.

Stand-Up India — closed to new loans

Stand-Up India lent ₹10 lakh to ₹1 crore to women, SC and ST founders for a first venture. It ran until 31 March 2025 and no longer takes applications, though standupmitra.in still describes it. A successor, Stand-Up India 2.0, with term loans up to ₹2 crore for first-time women, SC and ST entrepreneurs, was announced in the 2025-26 Budget but had not launched at the check date below.

Until it does, the same founders have MUDRA, PMEGP's higher special-category subsidy, and CGTMSE, where women entrepreneurs get the highest cover.

CGTMSE — a guarantee, so you need no collateral

Not a loan and not a subsidy. It is a guarantee the bank takes on your loan, so it can lend without asking you for property or a third-party guarantor. You pay the guarantee's fee.

It covers new and existing micro and small enterprises in manufacturing, services and trade, for loans up to ₹10 crore. Women-led businesses get higher cover. Ask your bank to cover the loan under CGTMSE; most will want your Udyam registration.

The scheme check below takes your amount, sector and situation, and tells you which of these are open to you, which are a "maybe", and what would decide it.