The finance ministry is assessing the potential impact of external shocks such as higher energy prices, supply-chain disruptions and cyber risks on the government’s flagship schemes that serve millions of industries, individuals and households, three people aware of the matter said. On Wednesday, financial services secretary M. Nagaraju will review the schemes at a meeting with the heads of major public sector banks, top officials of Mudra Ltd and the National Informatics Centre, the people said on the condition of anonymity.
The meeting will discuss central schemes to support artisans, street vendors, small enterprises, low-income households and rooftop solar installations, as well as some of the government’s flagship insurance schemes, the people said. The meeting comes against the backdrop of the war in Iran, which has walloped energy markets and rattled supply chains worldwide.
Schemes under review include the Pradhan Mantri Vishwakarma scheme for traditional artisans and craftspeople; Mudra Yojana for small entrepreneurs; Svanidhi scheme for urban street vendors; and the Surya Ghar Muft Bijli Yojana, the people cited above said. The review will check whether external shocks could affect the implementation of these schemes.
Review
“The review will also cover financial protection and inclusion programmes such as Pradhan Mantri Jeevan Jyoti Bima Yojana, Suraksha Bima Yojana, Atal Pension Yojana, and progress under the Jan Dhan Yojana,” one of the three people cited above said. The four schemes cover life insurance, accident insurance, pension and financial inclusion respectively.
The Jan Dhan Yojana focuses on opening zero-balance bank accounts to promote financial inclusion, while Jeevan Jyoti Bima and Suraksha Bima provide low-cost life and accident insurance through nominal annual premiums paid by subscribers. Atal Pension is a contributory pension scheme designed to offer guaranteed minimum pensions to unorganised sector workers. Government support for these schemes is limited mainly to awareness drives, operational costs, and occasional co-contributions or guarantees, rather than massive direct annual expenditure.
In the last five years, India’s nearly 80 million micro, medium and small enterprises () have faced off a pandemic, the Ukraine war, recurring West Asia crises, and trade disruptions under the Donald Trump administration. The health of these enterprises, which employ over 328.2 million people, is critical to the economy. MSMEs contribute 31.1% to India’s gross domestic product, 35.4% to output, and 48.58% to exports.
The government has also stepped up monitoring of fuel supply chains, fertilizer availability and banking system cyber-resilience to shield the economy from any spillover from the West Asia conflict, officials said.
Queries emailed to spokespersons of the Prime Minister’s Office; ministries of finance, MSME, housing and urban affairs, and new and renewable energy; the Indian Banks’ Association; NIC; and public sector banks including State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank and Union Bank of India, Bank of India, UCO Bank, Punjab & Sind Bank, Indian Overseas Bank, Indian Bank, Bank of Maharashtra and Central Bank of India remained unanswered.
Precaution
An industry official said the review signals a precautionary approach at a time of increased uncertainty.
“The government is trying to ensure that credit flows to the most vulnerable segments are not disrupted due to external shocks, particularly through schemes like Mudra and Svanidhi, which are critical for informal sector resilience,” said Vinod Kumar, president of the India SME Forum. Kumar added that elevated crude prices and logistics disruptions could tighten margins for MSMEs. “If the conflict persists, input costs and working capital cycles could come under stress, making timely credit delivery and subsidy support even more crucial.”
The West Asia war has muddied India’s growth outlook for 2026-27. In the preface to the finance ministry’s economic review for March, chief economic adviser V. Anantha Nageswaran highlighted “considerable downside” risks to the 7-7.4% growth range projected earlier. He noted that sustained geopolitical tensions could transmit shocks through four key channels: supply disruptions to oil, gas and ; higher import prices; elevated logistics costs; and possible pressure on remittances from the Gulf region. The combined impact on growth, inflation, the fiscal balance, and external balances “is likely to be significant,” he warned.
Costs
“West Asia tensions are tightening global liquidity and raising input costs, straining MSME cash flows, elevating credit risk, and potentially slowing hiring. This may temper incremental lending and financial inclusion momentum. However, India’s diversified demand base, policy responsiveness, and resilient banking system should cushion shocks,” said Rahul Singh, associate professor, OP Jindal Global University.
Launched in 2015, the Mudra Yojana has extended loans worth ₹40 trillion through over 578 million loan accounts, latest finance ministry data showed. The Jan Dhan Yojana had 578 million accounts, as per data shared in Parliament.
Under the restructured Svanidhi scheme, which has been extended till the end of FY30 with enhanced loan limits cumulative disbursements in earlier phases had crossed ₹13,000-14,000 crore. The Vishwakarma Scheme, launched in 2023 with a total central outlay of ₹13,000 crore for four years till FY28, provides collateral-free credit up to ₹300,000 in two tranches, along with skill training, toolkit incentives and support for digital transactions to traditional artisans and craftspeople.
Under the Surya Ghar Muft Bijli Yojana with a total outlay of ₹75,000 crore, nearly 2.62 million rooftop solar systems had been installed, benefiting around 3.2 million households, according to the ministry of new and renewable energy.