What are the criteria of Micro, Small, and Medium Enterprises, or MSME?

MSME symbolizes Micro, Small, and Medium Enterprises. The currently existing criteria of the definition of the Micro, Small and Medium Enterprises, or MSME that is based on the Micro,                                                                

Small and Medium Enterprises Development Act of MSMED Act, 2006. Before the criteria of the mentioned MSME definition was different for the manufacturing and services unit. The terms of financial limits were also very low. Ministry officials assured that the new definitions as per the MSMED Act, 2006 will strengthen and help to grow the MSMEs. The MSMEs contribute about 29 percent to India’s gross domestic products. It comprises almost half of its exportation. This unit has employed over eleven million workers.

Criteria of Micro, Small and Medium enterprises

i. Medium Enterprises    

 As per the criteria that are revised, a unit with an investment of fifty crores and a turnover of Rs 250 crore will fall under the category of Medium enterprises.                                                                                                        

ii. Micro Enterprises

As per the criteria that are revised, manufacturing and service unit with an investment of1 crore and a turnover of Rs 5 crore will fall under the category of Microenterprises.                                                                                         

iii. Small Enterprises

As per the criteria that are revised, a unit with an investment of ten crores and a turnover of Rs fifty crore will fall under the category of Small enterprises.

• A new composite formula of the classification of manufacturing and servicing units has been notified.
• Now there will be no differences between the manufacturing sectors and the service sectors.
• According to the Ministry officials, the new definition of MSME will pave way for the strengthening and growth of the Micro, small and medium enterprises or MSMEs.
• The provisions of excluding the export products from the counting of turnover will encourage the exportation of MSME in a betterway. There will be no fear to the lose the benefits of Micro, small and medium enterprises or MSME unit.
• It will exponentially add to the exports from the country that will lead to more growth and economic activity too. This will start the creation of jobs in an expanded manner.