The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) has been introduced to provide 60% guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC). This scheme offers support to Member Lending Institutions (MLIs) for credit facilities up to Rs.100 crore sanctioned to eligible MSMEs for the purchase of equipment and machinery.
Under the scheme, eligible borrowers must be registered MSMEs with a valid Udyam Registration Number, must not have non-performing asset (NPA) status with any lender, and must ensure that at least 75% of the project cost is allocated to equipment or machinery. The NCGTC, a fully owned entity of the Department of Financial Services, Ministry of Finance, will oversee the scheme's implementation. Once MLIs sanction loans to qualified MSMEs, they can submit loan details to the NCGTC portal, pay the applicable fees, and receive confirmation of the guarantee coverage.
Scheduled Commercial Banks (SCBs), All India Financial Institutions (AIFIs), and Non-Banking Finance Companies (NBFCs) can participate in the scheme as MLIs, provided they sign an agreement with the NCGTC.
Additionally, the government has recently introduced several tax-related measures to reduce the compliance burden on smaller businesses and individual taxpayers. These include presumptive taxation provisions for businesses under Section 44AD and Section 44AE of the Income-tax Act, tax audit provisions under Section 44AB, and the elimination of Tax Collected at Source (TCS) on the sale of specified goods under Section 206C. Rationalized Tax Deducted at Source (TDS) rates under various provisions of the Act have also been implemented.
The proposed Income-tax Bill 2025 aims to further simplify direct tax laws, making the provisions more concise, clear, and easier to understand. By eliminating redundant clauses and adopting a straightforward drafting style, the government seeks to create a more transparent and accessible tax regime.
This information was shared by Minister of State for Finance Shri Pankaj Chaudhary in a written reply during a session in the Rajya Sabha.