MSME, also known as Small Scale Industries were established on 2nd October, 2006 in order to promote, develop, and facilitate the competitiveness of the Micro, Small, and Medium Enterprises. It is a branch of Government of India that administrates, and formulates the laws, rules, and regulations regarding micro, small, and medium enterprises.
According to msme.gov.in, the MSME sector contributes nearly 45% of India’s total “Industrial Employment”, 95% of India’s total “Industrial Units” and 50% of India’s total “Exports”, which is a huge number describing the importance of MSME sectors. Not only that, but more than 6000 products are also manufactured in these industries.
However, it is not mandatory by the government to register, but it offers great benefits.
Further, MSME are classified into two categories:
- The Manufacturing Enterprises
- The Service Enterprises
Registrations can be obtained through the MSME act, even if the Enterprise lies in the manufacturing sector or service sector.
Manufacturing Enterprises are defined in terms of investment in machinery and plant which are further classified into three categories :
- Micro Enterprises : Does not exceed twenty-five lakh rupees
- Small Enterprises : More than twenty-five lakh, but does not exceed five crore rupees
- Medium Enterprises : More than five crores, but does not exceed ten crore rupees
Service Enterprises are engaged in providing or rendering services and are defined in terms of investment in equipment. It is also classified into three categories :
- Micro Enterprises : Does not exceed ten lakh rupees
- Small Enterprises : More than ten lakh, but does not exceed two crore rupees
- Medium Enterprises : More than two crores, but does not exceeds five crore rupees
Benefits of MSME Registration
Let’s take a look at the wonderful assistance by the Government of India.
- The Government of India offers various tax rebates to MSME.
- They provide easy access to credit.
- They comfort One Time Settlement Fee for non-paid amounts of MSME
- Governmentbestows tenders which are only open to the MSME Industries.
- Business registered under MSME are given a higher preference for government license and certification.
- Due to the MSME registration, bank loans became cheaper.
There are even more great offers and benefits. You will be able to enhance your business extremely well once you enroll with MSME.
Some of the schemes under MSME
- UDHYOG Aadhaar Memorandum – Ease in availing credit, loans, and subsidies from the government.
- Incubation – In this scheme, the government promotes new ideas, designs, products, etc by providing financial help of 75% to 80% of the project costs.
- Credit linked Capital Subsidy Scheme – New technology is provided in order to replace the old and absolute technology of the enterprises.
- Zero Defect Zero Effect – Under this module, Goods that are manufactured for export have to adhere, so that they are not rejected or sent back to India.
- Women Entrepreneurship -The government provides training, capital, counseling, and delivery techniques for all the working women throughout the country, so they can expand and manage their business efficiently.
- Quality Management Standards & Quality Technology Tools – The Government provides quality knowledge that helps to sensitize the businesses about new technologies.
- Grievance Monitoring System – Under this, the business owners can check the status of their complaints, open them if they are not satisfied with the outcome.
Nowadays, MSME is acting as a growth engine to India’s Economy. The economy of the country and MSME are co-related. As these enterprises grow, the economy of the country grows as a whole and flourishes. MSME need to be completely aware of the various government initiatives and correctly utilize these to their benefits. Government schemes should be monitored and effectively modified to suit the need of the present MSME sector.
It will be most accurate to say with fair and square that MSME are the “Grandiose Intrepid” of the Indian Economy.