MUDRA, PMEGP, Stand-Up India and CGTMSE
Know what each of the four big schemes gives, who it is for, and its limits.
8 min read
Four government schemes cover most of what a small business in India borrows or gets as a subsidy. They are often mentioned together, but 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, small finance bank, NBFC or microfinance institution, and you do not need collateral.
It comes in four sizes:
| Tier | Amount |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishore | ₹50,000 to ₹5 lakh |
| Tarun | ₹5 lakh to ₹10 lakh |
| Tarun Plus | ₹10 lakh to ₹20 lakh |
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 manufacturing or service project, with a bank loan for most of the rest. It does not cover trading (buying and reselling), and it is not for an existing business or one that has already had a subsidy under another government scheme.
- Largest project: ₹50 lakh for manufacturing, ₹20 lakh for services.
- Above ₹10 lakh (manufacturing) or ₹5 lakh (services), the applicant must have passed Class 8.
- The subsidy depends on who you are and where the unit is:
| Urban | Rural | |
|---|---|---|
| General category | 15% | 25% |
| Special category | 25% | 35% |
Special category includes women, SC, ST, OBC, minority, ex-servicemen, divyang and transgender applicants, and units in the North East, hill and border areas. You put in 10% of the project cost yourself, or 5% in the special category.
Apply on the PMEGP e-portal; KVIC, the state KVIB or the District Industries Centre then sends it to a bank.
Stand-Up India — a larger loan for a first venture
For women, SC and ST founders over 18, starting their first venture in a line of business. Loans run from ₹10 lakh to ₹1 crore, for manufacturing, services, trading or agri-allied activity.
It is a composite loan — term loan and working capital together — of up to 85% of the project cost. You bring 15% as margin money, at least 10% of it your own. If the business is a company or partnership, at least 51% must be held by an SC, ST or woman founder.
Apply through standupmitra.in or at a bank branch.
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.
These combine. A first-time founder might take a PMEGP subsidy on a bank loan that the bank covers under CGTMSE. A woman founder needing ₹30 lakh might look at Stand-Up India rather than MUDRA, which stops at ₹20 lakh.
Scheme rules change — Tarun Plus and the ₹10 crore CGTMSE ceiling both arrived in 2024-25. The check date is at the end of this lesson; before you apply, confirm on the scheme's own site.
The scheme check below takes your amount, sector and situation, and tells you which of these four are open to you, which are a "maybe", and what would decide it.
Rules checked on 23 September 2026 against mudra.org.in, PMEGP e-portal, standupmitra.in, cgtmse.in.