The Indian government has revised the Pradhan Mantri Mudra Yojana (PMMY), doubling the maximum loan cap to Rs.20 lakh specifically for the newly created “Tarun Plus” category, aimed at fostering growth among established entrepreneurs. This category is for those who have previously availed loans under the “Tarun” segment and successfully repaid them, a move designed to promote sustainable small businesses, according to the Finance Ministry. Finance Minister Nirmala Sitharaman confirmed this increase, emphasizing the government’s commitment to nurturing India’s entrepreneurial ecosystem.
“Expanding the Mudra loan limit will aid MSMEs and other small-scale enterprises by ensuring they have the financial backing necessary for expansion. It underscores our commitment to creating an inclusive environment for business growth,” Sitharaman said during her budget address in July.
The expansion of the Mudra scheme redefines the loan categories under PMMY, initially launched in 2015. With the addition of “Tarun Plus,” there are now four categories catering to varying levels of business maturity: ‘Shishu’ (up to Rs.50,000), ‘Kishore’ (up to Rs.5 lakh), ‘Tarun’ (up to Rs.10 lakh), and the latest ‘Tarun Plus’ (up to Rs.20 lakh). These structured categories are intended to provide micro-enterprises with incremental support as they progress through stages of growth and funding requirements.
The data underscores PMMY’s impact—over 48 crore loans worth Rs.29.79 lakh crore have been issued since its inception. These loans, provided by banks and non-banking financial institutions, are available to eligible MSMEs, Self Help Groups (SHGs), and individual entrepreneurs. The new Rs.20 lakh ceiling is expected to further encourage entrepreneurship, empowering those in agriculture, manufacturing, and service sectors across India.
Union Finance Ministry spokespersons highlighted that “this loan increase aligns with our objective to fund the unfunded, propelling small entrepreneurs towards a self-reliant India”.
The updated loan categories offer a clear, scalable path for business owners, reflecting a shift in policy towards supporting established micro-entrepreneurs with a robust foundation, paving the way for economic and social impact across sectors.
