What is the New definition of Micro, Small and Medium Enterprises?

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