• The government has notified significant revisions to the turnover and investment criteria for classifying Micro, Small, and Medium Enterprises (MSMEs), which will come into effect from April 1.

• During the Budget Speech, Union Finance Minister Nirmala Sitharaman had announced new classification criteria for MSMEs.

Revised Classification Criteria for MSMEs:

1) Micro Enterprises:

• Investment Limit: Increased from Rs 1 crore to Rs 2.5 crore.

• Turnover Limit: Increased from Rs 5 crore to Rs 10 crore.

2) Small Enterprises:

• Investment Limit: Increased from Rs 10 crore to Rs 25 crore.

• Turnover Limit: Increased from Rs 50 crore to Rs 100 crore.

3) Medium Enterprises:

• Investment Limit: Increased from Rs 50 crore to Rs 125 crore.

• Turnover Limit: Increased from Rs 250 crore to Rs 500 crore.

MSME sector in India

• The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. 

• It contributes significantly in the economy and social development of the country by fostering entrepreneurship and generating large employment opportunities at comparatively lower capital cost, next only to agriculture. 

• MSME are complementary to large industries as ancillary units and this sector contributes significantly in the inclusive industrial development of the country. 

• MSMEs not only play a crucial role in providing large employment opportunities at comparatively lower capital cost than large industries, but also help in industrialisation of rural and backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.

• The MSME are expanding their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets.

• MSMEs are the backbone of Indian economy. Operating in different areas across the country, more than six crore MSMEs have a crucial role to play in building a stronger and self-reliant India. 

• Out of the 6.13 crore registered MSMEs in India, nearly 40 per cent are owned by women. 

• According to registrations on Udyam Registration Portal and Udyam Assist Platform (UAP), the MSME sector in India is responsible for providing employment to 24.14 crore people.

(The author is a trainer for Civil Services aspirants.)