Revised Definition of MSME

Key Points

• Investment limit will be revised upwards.
• Additional criteria of Turnover.
• Both are cumulative conditions as there is used “and”.
• Criteria for Manufacturing & Services to be same

Both are cumulative conditions as there is used “and”. We can understand this with the help of the following illustrations:

Illustration 1.

Investment: 50 Lakhs

Turnover: 4 Cr

As investment is less than 1 Cr and Turnover is less than 5 Cr. It fulfilled both conditions of the Micro category. Hence, it is a Micro Enterprise.

Illustration 2.

Investment: 2 Cr

Turnover: 4 Cr

As investment is more than 1 Cr. Therefore, it is outside the purview of Micro Enterprise. As investment is less than 10 Cr and Turnover is less than 50 Cr. It fulfilled both conditions of the small category. Hence, it is a Small Enterprise.

Illustration 3.

Investment: 2 Cr

Turnover: 60 Cr

As turnover is more than 60 Cr. Therefore, it is outside the purview of Small Enterprise. As investment is less than 20 Cr and Turnover is less than 100 Cr. It fulfilled both conditions of the medium category. Hence, it is a Medium Enterprise.