As per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 enacted by the Government of India, the definition of an MSME encompasses Micro, Small and Medium Enterprises which are further classified into two broad categories.
Companies in the Manufacturing Sector
Enterprises involved in the manufacturing or production of goods for an industry listed in the first schedule of the Industries (Development and Regulation) Act, 1951 are included within the scope of MSME meaning.
Also, enterprises employing plant & machinery to add value to a finished product that results in a distinct name, use or character, come within the purview of micro small and medium enterprises meaning.
Based on their annual turnover, enterprises are classified under the following sub-categories.
Companies in the Service Sector
The MSME full form also extends to enterprises in the service sector. The sub-categorisation of companies in the service sector based on their annual turnover is as follows.
A proposed amendment to the MSMED Act, 2006 seeks to reorganise this classification and overwrite the manufacturing and service sector difference to bring more companies within the scope of MSME classification.
The new classification of what is MSME will have the following categorisations based on annual turnover irrespective of whether they belong to the manufacturing or the service sector.
With this information about MSME, eligible companies can seek funding for business growth and expansion. High-value funding options like MSME Loans from Bajaj Finserv are available with simple eligibility criteria for MSME Loan and minimum documentation.
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