Who are called Micro, Small and Medium Enterprises?

 

The Micro, Small and Medium Enterprises (MSMEs) sector has emerged as a highly prompt and dynamic sector in the Indian economy in the last five decades since India's independence. MSMEs saved India's economy from falling into recession during the economic downturn. In the true sense, this sector is playing a backbone role for the country's economy.

 

The Micro, Small and Medium Enterprises Development Bill - 2005 (it was presented on the Table of Parliament on 12 May 2005) has been approved by the President of India and thus an Act was enacted. The Act has been designated as Micro Small and Medium Enterprises Development Act 2006. Let us know who will be called micro, small and medium enterprises according to this act?

 

New Definition of Micro, Small and Medium Enterprises (MSMEs) Development Act-2006;

The definition of these new MSMEs is in force from April 7, 2018, which was finalized in the Cabinet Committee meeting chaired by the Prime Minister. After this change, now the MSMEs will be categorized on the basis of "Turnover" instead of investment in the earlier "Plant and Machinery".

 

Old Definition of Micro, Small and Medium Enterprises, 2018
Manufacturing MSME
Micro Enterprises	Annual turnover of rupee less than 5 crores
Small Enterprises	Annual turnover of rupee between 5 crores and 75 crores
Medium Enterprises	Annual turnover of rupee between 75 crores and 250 crores
	Service Area
Micro Enterprises	Annual turnover of rupee less than 5 crores
Small Enterprises	Annual turnover of rupee between 5 crores and 75 crores
Medium Enterprises	Annual turnover of rupee between 75 crores and 250 crores

 

 

Its a new definition has been given by the Government of India as follows: New Definition of MSME 2020.

 

 

Classification	Micro Industry	Small Industry	Medium Industry
Manufacturing & Services Sector	Investment less than 1 crore & turnover less than 5 crores	Investment less than 10 crores & turnover less than 50 crores	Investment less than 20 crores & turnover less than 100 crores

 

 

The contribution of Micro, Small and Medium Enterprises (MSMEs) to the Indian economy is as follows. At present, about 36.1 million units of Micro, Small and Medium Enterprises sector are functioning in India. Currently, MSMEs employ about 120 million people in India. MSMEs contribute about 45% of India's total exports. MSMEs contribute 6.11% to India's manufacturing-GDP, contributing 25% to GDP from the services sector. The region has consistently maintained an annual growth rate of over 10%. The sector contributes about 8% to the country's gross domestic product. Many units of MSMEs are also located in rural areas due to which migration from villages to cities has been halted.