What is MSME & Revised MSME Classification

The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is Nitin Gadkari and the Minister of State is Pratap Chandra Sarangi since 31 May 2019.

The statistics provided by the annual reports of Ministry of Small and Medium Enterprises (MSME) shows a rise in the plan amount spent on the khadi sector from ₹1942.7 million to ₹14540 million, and non-plan amounts from ₹437 million to ₹2291 million, in the period from 1994–95 to 2014–2015. The interest subsidies to khadi institutions increased from ₹96.3 million to ₹314.5 million in this period.

Q.1. What is MSME?

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

• A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
• A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
• A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.

• A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
• A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore;
• A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

Revised MSME Classification (Manufacturing & Service)

Composite Criteria: Investment and Annual Turnover

Investment 

• A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 1 crore;
• A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 1 crore but does not exceed Rs. 10 crore;
• A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.10 crore but does not exceed Rs.20 crore.

Annual Turnover

• A micro enterprise is an enterprise where the Turnover in plant and machinery does not exceed Rs. 5 crore;
• A small enterprise is an enterprise where the Turnover in plant and machinery is more than Rs. 5 crore but does not exceed Rs. 50 crore;
• A medium enterprise is an enterprise where the Turnover in plant and machinery is more than Rs.50 crore but does not exceed Rs.100 crore.