Revision in MSME Definition

With a vision to create more job opportunities in the MSME sector, the Union Government revised the guidelines of classification for MSMEs. The revision in MSME definition will cover more units under MSMEs.  The additional turnover criteria has been added in MSME classification along with the investment criteria.

The new MSME definition – turnover to define MSMEs

Revised Definition of the MSMEs:-

1.      Micro Enterprises: Entities having investment of Rs. 1 Crores and Annual Turnover upto 5 Crores

2.      Small Enterprises: Entities having investment of Rs. 10 Crores and Annual Turnover upto 50 Crores

3.      Medium Enterprises: Entities having investment of Rs. 20 Crores and Annual Turnover upto 10 Crores

Changes in MSME Classification:-

i. Manufacturing and Services Sector have been merged

ii. Limits of Investments in Plant and Machineries / Equipments has been revised upwards

iii. Additional Turnover Criteria has been introduced

The revised definition of MSMEs is to be implemented via an amendment that would further refine the business scenario for Indian enterprises.

The Union Cabinet approved the amendment to change the criteria to classify MSMEs from “investment in plant and machinery / Equipment” to “annual turnover.”

MSME stands for Micro, Small, and Medium Enterprises. MSMEs are covered under and protected the  Micro, Small, and Medium Enterprises Development (MSMED) Act in 2006.

1 reply

  1. This will greatly motivate different types of MSMEs particularly micro enterprises set up by women self-help group members, promoted by DAY-NRLM or NGOs or Banks or any other organisation

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