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Indian MSME's Registration

Until a few days back, MSMEs were characterized under the Micro, Small and Medium Enterprises Development Act, 2006. The definition depended on (i) interest in plants and machinery for manufacturing and service industries. The Cabinet has just approved the upward revision of the MSME definition, as well as the yearly capital and turnover slabs within it.

The central government has looked to reconsider the definition of MSMEs based on dual criteria of investment and turnover as below.

REVISED MSME CLASSIFICATION Effective from (01.07.2020)
Criteria: Investment in Plant & Machinery or Equipment and Annual Turnover
Manufacturing Enterprises & Service EnterprisesInvestment< Rs 1 Crore and

Turnover< Rs 5 Crore

Investment< Rs 10 Crore and

Turnover< Rs 50 Crore

Investment< Rs 50 Crore and

Turnover< Rs 250 Crore


MSME enrollment is not mandated, but it is recommended for MSME’s to get enlisted to benefit from many advantages like: 

  • Credit facilities without collateral (latest plan)
  • No fresh insolvency proceedings against MSMEs for 1 year
  • 45-days credit period for the beneficiary of any products or services to pay to the MSME supplier
  • Interest reduction ranging between 1 to 1.5 % on overdraft and different types of advances
  • Minimum Alternate Tax is permitted to be conveyed forward for as long as 15 years rather than 10 years
  • MSME explicit government tenders are being launched by the government
  • ISO accreditation charges reimbursements are permitted to MSME
  • Special treatment for government permits and licenses
  • Many MSME oriented rebates, subsidies and subventions
  • One-time settlement fee for unpaid amounts

The Government has also incorporated new plans, which include:

  • Credit and Financial Assistance Scheme
  • Prime Minister’s Employment Generation Program (PMEGP)
  • Credit Linked Capital Subsidy Scheme for the cause of Technology Upgradation(CLCSS)
  • Infrastructure Framework Support to MSMEs
  • Plan of Fund for Regeneration of Traditional Industries (SFURTI)
  • MSE Cluster Development Program (MSE-CDP)
  • Innovation Upgradation and Competitiveness Scheme for MSMEs
  • Digital MSME Schemes

Tool Rooms & MSME Technology Centers:

  • Lean Manufacturing Competitiveness Scheme (LMCS)
  • Computerized MSME Scheme
  • Budgetary Support to MSMEs in ZED Certification Scheme
  • Backing for Entrepreneurial and Managerial Development of MSMEs through Incubators
  • Instrument Rooms and MSME Technology Centers

What’s going on for MSMEs? 

The MSME stimulus package divulged by the Finance Minister on 13.05.2020 has opened new avenues for the upliftment of MSMEs. They are described as under:

  • Extending the definition of MSMEs guarantees more business and higher profits
  • 3 LakhCrores guarantee free automatic credits for businesses including MSMEs
  • 20,000 Crores subordinate obligation for MSMEs
  • 50,000 Crores value implantation through MSME Fund of Funds (FoF)
  • Global tendering in cases up to Rs. 200 Crores to be disallowed
  • E-Market linkage for MSMEs
  • MSME will be paid their dues in 45 days by Central governments and Public Sector Enterprises

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