Dynamic sector of Indian Economy
MSME is the abbreviation used for Micro, small and medium enterprises. MSM Enterprises or small-scale industries (SSIs) are like a backbone of the economy of the developing country like India. The growth of these industries directly impacts the growth of the Indian economy in a positive way. Whether the company deals in manufacturing or services, it can obtain MSME registration. Although it is not mandatory to apply for MSME registration but getting a business registered under MSME provides numerous benefits like credit facilities, loans, taxation, setting up the business etc.
Micro, Small and Medium Enterprises (MSME) sector was established to facilitate, develop and promote the competitiveness of the micro, small and medium enterprises and it has emerged as a dynamic sector of the Indian economy over the last sixty years.
Earlier, MSME classification was based on the criteria of investment in plant and machinery or equipment. So the MSME have to limit their investment to a lower limit to enjoy the MSME benefits.
|Manufacturing||Investment||<25 lakh||<5 Crore||<10 Crore|
|Services||Investment||<10 lakh||<2 Crore||<5 Crore|
These limits were impacting the growth of MSME as they were unable to scale their businesses further. After a long-pending demand for the revision of MSME classification, the government revised the msme classification under Aatmanirbhar Bharat Abhiyan(ABA) by inserting the criteria of both investment and annual turnover. The distinction between the manufacturing and service sector was removed. Following is the revised structure of MSME classification based on the criteria of both investment and annual turnover.
|<1 Crore &
|<10 Crore &
|<50 Crore &
MSME registration is completely an online process. The only documents required are PAN card and Aadhar Card. All the details related to PAN and GST will be pre-filled as the portal is fully integrated with income tax and GST websites.
Some of the MSME schemes approved by the govt. of India are-
1. Udyog Aadhar Memorandum scheme
3. Women Entrepreneurship
4. Grievance Monitoring system
5. Zero defect zero effect scheme
6. Credit linked capital subsidy
7. Quality management standards & quality technology tools
The Micro, Small and Medium Enterprises (MSME) were classified as per the MSME Act-2006 solely based on their investment. However, the Finance Minister Nirmala Sitharaman broadened the definition by introducing composite criteria. The process of MSME registration is paper-less and based on self declaration.