mobile
Micro, Medium & Small Scale Industry
Sector Update


Definition of MSMEs in India

Micro, Small and Medium Enterprises have been recognized as one of the key sector for employment generation and overall economic development of our country. The Micro, Small and Medium Enterprises development Act, 2006, was enacted to expand our focus to the entire gamut of micro, small and medium enterprises (MSMEs) both in manufacturing and service enterprises. This sector now provides employment to nearly 60 million persons and account for nearly 45 % of India’s manufacturing output.

 

In India, the enterprises have been classified broadly into two categories:

 

(i)             Manufacturing; and

 

(ii)            Those engaged in providing / rendering of services.

 

Both categories of enterprises have been further classified into micro, small and medium enterprises based on their investments in plant and machinery (for manufacturing enterprises) or on equipments (in case of enterprises providing or rendering services). The present ceiling on investments to be classified as micro, small or medium enterprises is as under:

 

Classification

Investment Ceiling for Plant, Machinery or Equipment*@

Manufacturing Enterprises

Service Enterprises

Micro

Upto Rs. 25 Lakh (Us $ 50 thousand)

Upto Rs. 10 Lakhs (US$ 20 Thousand)

Small

Above Rs. 25 Lakh (Us% 50 thousand) & upto Rs. 5 crore (US$ 1 million)

Above Rs. 10 lakh (US $ 20 thousand) & up to Rs. 2 crore (US$0.40 million)

Medium

Above Rs. 5 crore (US$ 1 million) & upto Rs. 10 crore (US$ 2 million)

Above Rs. 2 crore (US $ 0.40 million) & up to Rs. 5 crore (US$ 1 million)

* Fixed costs are obviously higher

 

Definitions before 2nd October 2006

 

Classification

Investment Ceiling for Plant, Machinery or Equipment*

Manufacturing Enterprises

Service Enterprises

Micro

Upto Rs. 25 Lakh (Us $ 50 thousand)

Upto Rs. 10 Lakhs (US$ 20 Thousand)

Small

Above Rs. 25 Lakh (US$ 50 thousand) & upto Rs. 1 crore (US$0.20 million)

-

Medium

Not defined

Not defined

* Excluding land and building

@ US$ 1 = Rs. 50 (April 2009)