MSME Definition
The classification of Micro, Small and Medium Enterprises is defined under the MSMED Act 2006 amendment dated 01/06/2020. The Micro, Small and Medium Enterprises is based on the Investment in Plant, Machinery or Equipment values (excluding land and building) and Annual Turnover. This shall come into effect from 01.07.2020.
- Micro Enterprise: Where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees.
- Small Enterprise: Where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees.
- Medium Enterprises: Where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.
Classification of Enterprises (Principal Trade in First Schedule of IDR Act, 1951)
| Revised MSME CLASSIFICATION as per MSME ACT 2006 w.e.f. 01/07/2020 | |||
| Composite Criteria: INVESTMENT In PLANT & MACHINERY / EQUIPMENT And ANNUAL TURNOVER | |||
| Classification | Micro Enterprises | Small Enterprises | Medium Enterprises |
| Manufacturing Enterprises and Services Enterprises | Investment in Plant and Machinery or Equipment: Not more than Rs. 1 Crore & Turnover: Not more than Rs. 5 Crore | Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore & Turnover: Not more than Rs. 50 Crore | Investment in Plant and Machinery or Equipment: Not more than Rs.50 Crore & Turnover: Not more than Rs. 250 Crore |
Constitution of Advisory Committee at national level to make recommendations:
- level of employment in a class or classes of enterprises;
- level of investment in plant and machinery or equipments;
- Discretionary for a micro or small enterprise and also for a medium enterprises engaged in providing or rendering of services,
- Obligatory (compulsory) for a medium enterprise engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule (IDR Act),
- For medium enterprises, the Central Government shall specify by notification the authority with whom they would file memorandum,
- In respect of micro & small enterprises the State Govt. shall by notification, specify such Authority.
Measures for promotion, development and enhancement of competitiveness of micro, small and medium enterprises:
- Extension of credit facility for micro, small and medium enterprises,
- Preference policies in procurement of goods and services for micro and small enterprises,
- Provision for Central funds.
Delayed payments to micro and small enterprises:
he Act stipulates that the payments for supplies or services have to be cleared in favour of micro and small enterprises within 45 days of acceptances. The State Government shall, by notification, constitute one or more Micro and Small Enterprises Facilitation Council to monitor the matter of delayed payments
Power to make Rules:
- The Central Government may, by notification, make rules to carry out the provisions of the Act.
- The State Government may also, by notification, make rules to carry out the provisions of the Act.