Introduction

The Micro, Small and Medium Enterprises (MSME) sector has become a highly vibrant and dynamic sector of the Indian economy in the last five decades. MSMEs not only play an important role in providing large employment opportunities at lower capital costs than large industries, but also help in the industrialization of rural and backward areas, thereby reducing regional imbalances, higher national incomes and wealth. Equal distribution is assured. MSMEs complement large industries as ancillary units and the sector contributes greatly to the socio-economic development of the country.

Classification 

The present ceilings on investment & Turnover for enterprises to be classified as micro, small and medium enterprises are as follows:

Revise MSME Classification
Composite Criteria: Investment & Annual Turnover
Classification Micro Small Medium
 

Manufacturing & Service Industries

 

Investment < Rs 1 Cr.

And

Turnover < Rs 5 Cr.

Investment < Rs 10 Cr.

And

Turnover < Rs 50 Cr.

Investment < Rs 50 Cr.

And

Turnover < Rs 250 Cr.

Who can Apply For MSME

Proprietorships Hindu Undivided Family Partnership Firm
One Person Company Limited Liability Partnership Private Limited Company
Limited Company Producer Company Any association of persons
Co-operative societies

Basically, all Manufacturing & Service Industries are allowed to take registration under MSME Act. Few Exceptions are given in notification no UAM/MC/01/2017-SME in which traders are excluded from the list.

MSME Registration

Business Entity can register it self under MSME ACT at www.udyamregistration.gov.in and get registration certificate as Udhyam Registration.

MAJOR PLAN SCHEMES IMPLEMENTED BY THE MINISTRY

  • National Manufacturing Competitiveness & Lean Manufacturing Programme

The program aims to develop global competitiveness among Indian MSMEs by improving their processes, designs, technology and market access. The program envisages substantial investment to expand the entire value chain of the MSME sector. All ten components of NMCP have already been commissioned and are likely to spur innovation and development in the MSME sector.

Under the Lean Manufacturing Program (LMP), MSMEs are being helped to reduce their manufacturing costs, through proper manufacturing management, better space utilization, scientific inventory management, better process flow, shorter engineering time and so on. LMP improves the quality of products and reduces costs, which are necessary for competition in national and international markets.

  • Promotion of Information & Communication Tools (ICT) in MSME sector:

Comprehensive activities planned under this component include identifying potential MSME manufacturing clusters for ICT interventions, setting up of e-readiness centres, developing web portals for clusters, skill development of MSME staff / employees, designing local software solutions for MSMEs Doing this involves increasing their competitiveness. , Etc. and networking MSME clusters on national level portals to advance MSMEs in global markets.

  • Technology Up gradation and Quality Certification Support to MSMEs

The major activities planned under this component include Capacity Building of MSME Clusters for Energy Efficiency/Clean Development Interventions, Implementation of Energy Efficient Technologies in MSME sector, setting up of Carbon Credit Aggregation centres and encouraging MSMEs to acquire product certification licenses from National / International bodies.

  • Tools (QTT)

The objective of the scheme is, to improve the quality of the products in the MSME sector and inculcate the quality consciousness in enterprises in this sector. The major activities are (i) Introduction of Appropriate Modules for Technical Institutions; (ii) Organizing Awareness Campaigns for MSEs; (iii) Organizing Competition-Watch (C-Watch); (iv) Implementation of Quality Management Standards and Quality Technology Tools in selected MSMEs; (v) Monitoring International Study Missions; and (vi) Impact Studies of application of QMS/ QTT.

  • ISO 9000/14001/HACCP Reimbursement Scheme

To enhance the competitive strength of the MSEs, the Government introduced a scheme to provide technological upgradation, quality improvement and better environment management by the MSEs. The scheme reimburses 75% of the fees, subject to a maximum of Rs.75,000 for acquiring Quality Management System (QMS) ISO 9000/HACCP certification and/or Environment Management System (EMS) ISO 14001 certification by the MSEs The Scheme provides one-time reimbursement.

  • Building Awareness on Intellectual Property Rights for the MSMEs
Financial Assistance (Reimbursement) For IPR
Domestic Patent Upto Rs 1,00,000
Foreign Patent Upto Rs 5,00,000
Trade Mark Upto Rs 10,000
Geographical Indication Upto Rs 2,00,000
  • Marketing Assistance and Technology Upgradation Scheme for MSMEs

The objective of this component is to identify and encourage such clusters of MSMEs, which have quality production and export potential and assist them to achieve competitiveness in the national and international markets through technological Upgradation in packaging, skill upgradation /development of

modern marketing techniques, competition studies, participation in local exhibition/fairs, setting up of marketing hubs etc.

  • Public Procurement Policy

Minimum 25 % of the total annual purchase or services procured by Central Ministries/ Govt Departments/PSUs/Authorities Shall be from MSEs.

Out of 25 % sub-target 4% from MSMEs owned by SC/ST entrepreneurs.

Out of 25% sub-target 3% from MSMEs owned by women entrepreneurs.

Further 15% weightage in price preference also given to Msme entity. If MSEs quoting price within price band Lower 1 (Other than MSE) + 15% shall be allowed to supply at Lower Price subject to lowering of price by MSEs to Lower.

  • Protection Against Delayed Payment Under Msmes

The Objective of the scheme is to make available funds with MSME. Under the scheme Buyer is required to pay outstanding amount within 45 Days. Otherwise beyond 45 days Msme entity get legal right to receive interest at 3 times of normal bank rate.

  • Prime Minister’s Employment Generation Programme

PMEGP is a credit linked subsidy scheme of the Ministry, implemented through KVIC, DICs and State KVI Boards with KVIC as the Nodal Agency at the national level for setting up new self-employment ventures/ projects/ micro enterprises to generate employment opportunities in rural as well as urban areas of the country. Encourage Entrepreneur through Credit Link subsidy Support up to 35%.

SUBSIDY UNDER PMEGP

  URBAN AREA RURAL AREA
General Category 15 % 25 %
Special Category 25 % 35 %

INVESTMENT
10 % Investment Margin required for General Category
05 % Investment Margin required for Special Category
  • Credit Guarantee Scheme for Micro and Small Enterprises:

The objective of the scheme is to make available credit to SSI units, particularly tiny units, for loans up to Rs. 200 lakhs without collateral/ third party guarantees. The Scheme covers collateral free credit facility (term loan and/ or working capital) extended by eligible lending institutions to new and existing micro and small enterprises up to Rs. 200 lakh per borrowing unit.

  • Credit Linked Capital Subsidy Scheme (CLCSS)
    For Both Old or New Enterprises (Machinery for Technology upgradation) .
    Subsidy @ 15% of Institutional Credit for Technology upgradation up to Loan of Rs 1 Crore.
  • MSE Cluster Development Programme

To Support the substantially and growth of MSEs by addressing common issue such as Improvement of technology, Skill & Quality, Market Research, Upgradation, Set up common facility centres etc. Grant at 70% of the cost of project subject to maximum Rs 20.00 Crores.

  • E-Discounting Trade Receivable “Treds”

Electronic platform for facilitating the financial/ discounting of trade receivable of MSMEs through multiple financiers. Amount will be credited in 3 Days only.

  • Stand Up India Scheme

To promote women and special category entrepreneurship under this scheme every bank branch needs to sanction minimum one loan to SC/ST and one loan to women entrepreneur.

  • International Cooperation (IC) Scheme

The scheme will include the following activities, including deputation of MSME business delegations to explore / upgrade new areas of technology in other areas, facilitation of joint ventures, market improvement of MSMEs products, foreign collaboration, participation by Indian MSMEs in international exhibitions, Trade fair included. And buyers and sellers meet abroad as well as in India, which has international participation. IC Scheme provides financial assistance towards the airfare and space rent of entrepreneurs. State/Central Government Organisations, Industry/Enterprise Associations and Registered Societies/ Trusts and Organisations associated with the promotion and development of MSMEs are eligible to apply.

  • Assistance to Training Institutions Scheme

The scheme provides financial support for the establishment of new institutions (EDIs), and strengthens

Infrastructure of the existing EDI and to support entrepreneurship and skill development activities. These training institutes will be assisted in the form of capital grants to support the construction and strengthening of the infrastructure for the development of entrepreneurship and skill development programs. Maximum assistance for building or strengthening infrastructure is Rs. 150 lakhs on matching basis, not to exceed 50% of the project cost.

  • Survey, Studies and Policy Research

The main objectives of the Scheme are (i) to regularly/periodically collect relevant and reliable data on various aspects and features of MSMEs, (ii) to study and analyse, on the basis of empirical data or otherwise, the constraints and challenges faced by MSMEs as well as the opportunities available to them in the context of liberalization and globalization of the economy, and (iii) to use the results of these surveys and analytical studies for policy research and designing appropriate strategies and measures of intervention by the Government. Several studies on the MSME sector and evaluation studies of various schemes implemented by the Ministry have been completed under this scheme.

  • Revamped Scheme of Fund for Regeneration of Traditional Industries: SFURTI

For traditional and rural industries, we have significantly increased allocations and revamped the ongoing scheme of fund for upliftment of traditional industries (SFURTI) to achieve better and more intensive coverage with professional / expert input. A special component scheme has been approved at a cost of Rs 76 crore to support 100 Khadi institutions and self-help groups in the border, hill and left wing extremism affected areas.

  • Technology Centre Systems Programmes

Under Technology Centre System Programme , 15 New Technology Centres (Tool Rooms) would be set up and existing Tool Rooms would be upgraded with support of world Bank. The expanded and upgraded network would be supplied by (a) Technology partners to strengthen technical capabilities of MSMEs (b) Clusters Network Managers to establish linkages amongst all key stakeholders of entire ecosystem and (c) National portal for creating a vibrant and interactive platform to meet various needs of MSMEs.

  • Skill Mapping

 MSMEs have also compiled district wise skill development requirements based on the district industrial profile of 658 districts. District-wise skill development needs have been created on the basis of industry clusters located in the respective districts. In addition, based on industry groups, the types of skills required to produce products and, subsequently, the need for training programs to be conducted to manipulate non-employed youth have been identified. The 29 column forms for skill mapping in each district based on industry groups have been developed to cover all possible information – including the name of technical institutes (ITIs, polytechnics and engineering colleges with facilities). The draft has been shared with the Ministry of Skill Development, National Skill Development Council and Industry Associations.

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