MSME, i.e., Ministry of Micro, Small, and Medium Enterprises, is an apex body launched by the Government of India. This scheme is designed in agreement with the MSME Development Act of 2006. The units engaged in the manufacturing, production, preservation, or processing of commodities and goods.
It contributes approximately 8% of India’s GDP, around 40% of its exports, and nearly 45% of manufacturing outputs. Hence, it is not false to say that this body has become the ‘Backbone of the country.’
Today, it has become a vital sector of the country’s economy. It has contributed extraordinarily to India’s socio-economic development. People not only get employment chances but also provide a helping hand in the development of the country’s rural and backward areas.
Dive into this article to understand more about MSMEs!
What Is the New Definition of MSMEs?
The Ministry of MSMEs has made some changes in the definition of MSME. These changes are implemented from 1st July 2022.
According to the new MSMEs definition,
- The investment in Micro-manufacturing and services units has increased upto ₹1,00,00,000 with a turnover of upto ₹5,00,00,000.
- The investment in Small manufacturing and services units has increased upto ₹10,00,00,000 with a turnover of upto ₹50,00,00,000.
- The investment in the Medium manufacturing and services unit has increased upto ₹20,00,00,000 with a turnover of upto ₹100,00,00,000.
However, there are further revisions in the MSME definition for the Medium manufacturing and services unit. Now, the investment amount has increased upto ₹50,00,00,000 with a turnover of upto ₹250,00,00,000.
What Are the Features of an MSME Organisation?
Some important features of MSMEs are given below:
- It provides security-free loans for the needy ones. They can set up their business with the assistance of these loans.
- It works for the well-being of artisans and workers.
- It aids you in getting credit support from banks.
- It has opened many specialised training centres to develop your skills.
- It provides aid for improving access to the domestic and export markets.
- It supports product development, design innovation, packaging, and design intervention.
- It also supports infrastructure, upgraded technology, and modernisation.
- It offers the latest trial facilities and quality certification.
What Is the Role of MSME Organisations in the Indian Economy?
Today, India has more than 6.3 crores of recorded MSMEs. With a rate of around 18.5%, MSMEs are growing in the country. Data prove that till November 2020, more than 1.1 million MSMEs filed successfully.
Some roles that MSMEs played in the Indian economy are given below:
- In rural areas, it has generated more employment opportunities.
- It has played a crucial role in offering assistance with flexibility in operations, providing low-interest loans, huge demand for production, and cost-effective imports.
- It helps entrepreneurs by operating business skills development programs.
- It helps the public by teaching them new technologies to help them with their businesses.
- It provides a helping hand for setting them up for their successful business.
What Are the Opportunities Provided by the MSME Organisation?
The MSME organisation provides vast opportunities. It is because of its succeeding factors that are given below:
- Funding: Subsidies and Finance.
- Export potential and promotion for Indian products.
- In the domestic market, develop growth in demand.
- Government’s support and promotion.
- Training for business development skills.
- Business opportunities with less capital investment.
- Machinery procurement and raw materials.
- Project profiles.
- Testing and tooling support, etc.
What Are the Duties of MSMEs?
Different countries have different standards for identifying MSMEs. In India, MSMED Act, 2006, under section 7, MSMEs are classified depending upon the company’s capital investments and equipment.
Some important duties of this organisation are given below:
- It helps in providing financial assistance and subsidies to the needed entrepreneurs.
- It creates a competitive environment to bring Indian MSME upto the international level.
- It provides the latest technologies to improve the manufacturing base in India.
- It supports promoting MSMEs with the cluster-based approach.
- It provides marketing assistance to these companies.
- It provides skill development and business training education.
- It assists in creating new small micro-scale enterprises through the PMEGP scheme.
- It promotes the Coir Industry and Khadi and Village Industries sectors.
What Are the Requirements of MSME for the Manufacturing Business Sector?
- If the expenditure in the company and equipment is below ₹25,00,000, it is considered Micro Enterprise.
- If the investment in the company and its machinery lies in the range of ₹25,00,000 to ₹5,00,00,000, it is considered a Small Enterprise.
- If the expenditure of the company and equipment ranges from ₹5,00,00,000 to ₹10,00,00,000, it is considered a Medium Enterprise.
What Are the Requirements of MSME for the Service Enterprises Sector?
- Any company’s plant and equipment investment is below ₹10,00,000, which is considered a Micro Enterprise.
- If any company’s plant expenditure lies in the range of ₹10,00,000 to ₹2,00,00,000, it is considered a Small Enterprise.
- If any company’s plant expenditure lies in the range of ₹2,00,00,000 to ₹5,00,00,000, it is considered a Medium Enterprise.
In the End,
The Government of India has designed MSME organizations with a vision of preparing micro, small, and medium-scale enterprises that are the most significant contributors to the country and its economy. This organisation wishes to bring the MSMEs up to the international level and make them competitive internationally.