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MSME Full Form in India

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What is MSME (Micro, Small & Medium Enterprises)?

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.
 

What type of business comes under MSME?

  1. 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.
     

    • Micro enterprises – Companies whose annual turnover does not exceed Rs.25 lakh.
    • Small enterprises – Companies whose annual turnover is between Rs.25 lakh and Rs.5 crore.
    • Medium enterprises – Companies whose annual turnover is between Rs.5 crore and Rs.10 crore.
     

     

  2. 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.
     

    • Micro enterprises – Companies whose annual turnover is within Rs.10 lakh.
    • Small enterprises – Companies whose annual turnover ranges from Rs.10 lakh to Rs.2 crore.
    • Medium enterprises – Companies whose annual turnover ranges from Rs.2 crore to Rs.5 crore.
     

     

Changes to the MSME Definition as per the Proposed Amendment

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.

  1. Micro enterprises – Companies whose annual turnover does not exceed Rs.5 crore.
  2. Small enterprises – Companies whose annual turnover ranges between Rs.5 crore and Rs.75 crore.
  3. Medium enterprises – Companies whose annual turnover ranges between Rs.75 crore and Rs.250 crore.

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.

Fulfil business requirements like infrastructure improvement, working capital infusion, plant & machinery installation and many more with an MSME Loan of up to Rs.30 lakh.

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