MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.
The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.
What are Micro, Small and Medium Enterprise?MSME Registration Process.Benefits of MSME Registration. Information Required for MSME Registration. MSME schemes launched by the Government are: Even if the Company is in the manufacturing line or the service line, registrations for both these areas can be obtained through the MSME act. This registration is not yet made mandatory by the Government 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.
The MSME became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises.
The existing MSME classification was based on the criteria of investment in plant and machinery or equipment. So, to enjoy the MSME benefits, the MSMEs have to limit their investment to a lower limit, as mentioned below:
| Sector Criteria | Micro Small Medium |
| Manufacturing | Investment < Rs.25 lakh < Rs.5 crore < Rs.10 crore |
| Services | Investment < Rs.10 lakh < Rs.2 crore < Rs.5 crore |
These lower limits are killing the urge to grow as they are unable to scale their businesses further. Also, there has been a long-pending demand for the revision of MSME classification so that they can further expand their operations while continuing to avail the MSME benefits.
Now, under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification* by inserting composite criteria of both investment and annual turnover. Also, the distinction between the manufacturing and the services sectors under the MSME definition has been removed. This removal will create parity between the sectors. The following is the revised MSME classification*, where the investment and annual turnover, both are to be considered for deciding an MSME.
Revised MSME ClassificationCriteria Micro Small Medium*Investment & Annual Turnover < Rs.1 crore &< Rs.5 crore < Rs.10 crore &< Rs.50 crore < Rs.50 crore &< Rs.250 crore Aadhaar Card copy of the Individual / Proprietor / Partners / Directors duly linked with a Mobile No in active Pan Card Copy of Individual / Proprietorary / Partners / Directors ( linked with Aadhaar MSME CERTIFICATE if already registered.PAN CARD OF THE COMPANY (constitution whatever it may concern).GST NO OF THE COMPANY (please note GST NO PREPARED BY THE COMPANY PAN NO IS ESSENTIAL EXCEPT INDIVIDUAL APPLY).Company Mail id and Phone / Mobile no to contact.Bank Details of INDIVIDUAL / COMPANY either Savings Account or Current Account.ITR RETURN STATEMENTS INCLUDING PROFIT & LOSS DETAILS (Please request the clients not to send acknowledgement only).State whether the company having one registered name / office and the unit name / unit office are same. If they are having any units for production / services as with any branch the details is to be receive.State the Social Category as their will as General / SC/ ST / OBC.Specially disabled if any.State whether they want to register as manufacturer / services or both.How many employees worked with the company as male / female / others if any.Are they willing to participate in Gem portal or not.