MSME

1. Introduction

Micro, Small and Medium Enterprises (MSME) constitute one of the most important sectors of the Indian economy. They contribute significantly to industrial output, employment generation, exports, and balanced regional development. MSMEs operate across manufacturing, services, and trade sectors.

2. Legal Framework

The MSME sector in India is governed by the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The Act provides definitions, development measures, and facilitation mechanisms for MSMEs.

3. Classification of MSMEs (Revised – 1 July 2020)

Under the revised criteria (based on Investment in Plant & Machinery/Equipment and Annual Turnover):

A. Micro Enterprise

 Investment: Up to ₹1 crore

 Turnover: Up to ₹5 crore

B. Small Enterprise

  Investment: Up to ₹10 crore

 Turnover: Up to ₹50 crore

C. Medium Enterprise

 Investment: Up to ₹50 crore

  Turnover: Up to ₹250 crore

4. MSME Registration (Udyam Registration)

From 2020 onwards, MSME registration is known as Udyam Registration.

It is:

 Aadhaar-based

 Paperless

After registration, the enterprise receives a Udyam Registration Certificate, valid for lifetime (subject to updating information).

5. Benefits of MSME Registration

Registered MSMEs are eligible for various benefits, such as:

Financial Benefits

 Collateral-free loans under CGTMSE Scheme

  Priority sector lending by banks

 Subsidy on interest rates for loans

 Special refinancing support through SIDBI

Protection and Legal Benefits

 Protection against delayed payments under Section 15–23 of MSMED Act

  Ability to file cases on MSME Samadhan portal for delayed payments

Government Assistance

 Access to Government e-Marketplace (GeM)

 Preferential procurement in government tenders

 Technology upgradation assistance

 Subsidies for ISO certification

 Support for exporting activities

Other Benefits

 Easy approval for licenses and registrations

 Electricity bill concessions (state-specific)

 Reduced fees for trademark and patent applications

6. MSME Samadhan

An online portal where MSMEs can file complaints regarding delayed payments from buyers. The cases are processed through Micro & Small Enterprises Facilitation Council (MSEFC).

7. MSME Sambandh

A portal monitoring public procurement from MSMEs to ensure they get fair participation in government purchases.?

8. MSME Sustainable (ZED) Certification

Promotes Zero Defect–Zero Effect manufacturing, offering certification and incentives for quality improvement and reduced environmental impact.

9. Role of MSMEs in Indian Economy

 Employ over 11 crore people

 Contribute about 30% of GDP

 Contribute nearly 50% of India’s exports

 Promote entrepreneurship and innovation

 Aid in decentralised and inclusive economic growth

10. Conclusion

MSMEs play a critical role in India's economic development by fostering innovation, generating employment, and supporting balanced industrial growth. With simplified registration processes and wide-ranging government schemes, MSMEs are becoming increasingly empowered to contribute to national economic progress.