MSME Definition 2020: The Micro Small and Medium Enterprises (MSMEs) are classified as per the MSME Act-2006. In the economic package to the MSME sectors of the country, FM Sitharaman has provided 3 lac crore loan to boost up this sector.
The Micro, Small and Medium Enterprises (MSMEs) sector has emerged as a highly vibrant and dynamic sector in the Indian economy over the last five decades. MSME sector had saved India’s economy from great recession in 2008 and still contributing like the backbone of the economy
As per MSME Act-2006, The MSMEs are classified into two categories;
1. Manufacturing Enterprises-The enterprises engaged in the manufacture or production of goods (as per Development and Regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.
2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.
In the month of February 2018, the Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved a change in the definition of the MSMEs.
Now MSMEs will be defined on the basis of ‘annual turnover’ instead of investment in plant & machinery/equipment.
Now let us know the Old definition of the MSMEs in India;2018
Manufacturing Sector
Enterprises
Micro Enterprises
Annual turnover is less than Rs.5 cr.
Small Enterprises
Annual turnover is between Rs. 5 Cr to Rs. 75 cr.
Medium Enterprises
Annual turnover is between Rs. 75 Cr to Rs. 250 cr.
Service Sector
Enterprises
Micro Enterprises
Annual turnover is less than Rs.5 cr.
Small Enterprises
Annual turnover is between Rs. 5 Cr to Rs. 75 cr.
Medium Enterprises
Annual turnover is between Rs. 75 Cr to Rs. 250 cr.