Micro, Small and Medium Enterprise (MSME), introduced by Government of India under Micro, Small & Medium Enterprises Development (MSMED) Act, 2006. These enterprises primarily engaged in the production, manufacturing, processing or preservation of goods and commodities.
The micro small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development. This sector is considered as the backbone of Indian economy that has contributed substantially in the socio-economic development of the nation.
The MSMEs play a vital role in the overall growth of industrial economy of the country. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.
The Long term goal of the Govt. under this Ministry is to enhance manufacturing base in the country by improving performance of msmes through skill and entrepreneurship development.
|Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover|
|Manufacturing Enterprises and Enterprises rendering Services||Investment in Plant and Machinery or Equipment:
Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore
|Investment in Plant and Machinery or Equipment:
Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore
|Investment in Plant and Machinery or Equipment:
Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore
Advantages of MSME
- Loans without Security (These loans are undertaken by SIDBI (Small Industries Development Bank of India), GOI (Government of India), and the Ministry of MSME under the scheme name of “The Credit Guarantee Trust Fund Scheme”.)
- Discount on Industrial Promotion & Patent Registration (Enterprises can be registered under the MSME Act are given a hefty subsidy of 50% for industrial promotion & patent registration.)
- Concession on Electricity (To avail this concession, MSME registered firm have to submit the electricity bills invoices, an appropriate application, and a copy of the MSME registered certificate.)
- Compensation of ISO Certification Charges (Can claim the compensation for the money spend on ISO certification procedures and related registration.)
- Overdraft facility along with Interest Rate Freedom (eligible to benefit 1% on the overdraft under the Credit Guarantee Trust Fund Scheme, but it varies from bank to bank.)
- Safety against Delayed Payments (If the buyer delays the payment for more than 45 days, the enterprise is eligible to charge compound interest, which is three times the RBI rate.)
- Tender Preference to MSME
Registration under MSME
The government of India has launched a website for registration as MSME. Anyone interested in setting up a MSME can fill up the form on the website and upload the required documents. The entire process is completely online.
Official website: msme.gov.in
Schemes implemented by MSME
- Prime Minister’s Employment Generation Programme (PMEGP)
- 2nd Loan for up-gradation of the existing PMEGP/MUDRA units
- Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE)
- Credit Linked Capital Subsidy Component (CLCS & TU Scheme)
- Procurement and Marketing Support (PMS) scheme
- International Cooperation (IC) Scheme
- Micro & Small Enterprises Cluster Development Programme (MSE– CDP)
- Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
- A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
- ZED Certification Scheme
- Lean Manufacturing Competitiveness for MSMEs
- Design Clinic for Design Expertise to MSMEs
- Digital MSME
- Entrepreneurial and Managerial Development of SMEs through Incubators
- Pottery Activity under Gramodyog Vikas Yojana (GVY) scheme
- Beekeeping Activity under “Gramodyog Vikas Yojana(GVY) Scheme
- Agarbatti Making Project under “Gramodyog Vikas Yojana(GVY) Scheme
The MSME sector has often been termed the ‘engine of growth’ for developing economies. We have analyzed the growth of MSMES in fixed investment, production performance, employment generation and export contribution. We have discussed about Employment opportunities, Infrastructure Development, Testing laboratories, foreign direct investment policy, De-reservation, Competitive technology, Export promotion within the MSME sector.
The factors like export promotion, reservation policy, tooling& technology, manpower training, technology and managerial skills gave enormous opportunities for growth and better performance in the economy.
It is concluded that MSMEs in the Indian Economy have shown tremendous growth and excellent performance with the contribution of policy framework and efficient steps which had been taken by the Government time to time for the growth of the MSMEs sector.