Micro, Small and Medium Enterprises (MSME)

MSME registration helps the Micro, Small and Medium (MSME) industries to obtain various benefits provided by the government for their growth. In a developing country like India, MSME industries are the backbone of the economy. When these industries grow, the country’s economy grows and flourishes. These industries are also known as small-scale industries or SSIs.

The MSME registration is not yet made mandatory by the Government of India but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.

MSME classification

Initially, when the government introduced the MSME registration in 2006, the MSME classification was based on the investment criteria in plant and machinery or equipment. The government revised the MSME classification by inserting composite investment and annual turnover criteria. Also, the distinction between the manufacturing and the services sectors under the MSME definition was removed.

The following is the current revised MSME classification, where the investment and annual turnover are to be considered for deciding if an entity is considered as an MSME:

Revised MSME Classification

Criteria	Micro	Small	Medium
Investment limit (in Rs.) Turnover limit (in Rs.)	< Rs.1 crore < Rs.5 crore	< Rs.10 crore < Rs.50 crore	< Rs.50 crore < Rs.250 crore

Benefits of Registration as MSME (Udyam)

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