MSME Definition as per 2021
As of my last knowledge update in September 2021, the definition of Micro, Small, and Medium Enterprises (MSMEs) in India was primarily based on two criteria: investment in plant and machinery (for manufacturing enterprises) or investment in equipment (for service enterprises) and annual turnover. However, please note that government policies and definitions may change over time, so it’s important to verify the latest information from official sources. Here’s the definition as it stood in 2021:
- Micro Enterprises:
- Manufacturing Enterprises: Investment in plant and machinery or equipment not exceeding INR 25 lakhs.
- Service Enterprises: Investment in equipment not exceeding INR 10 lakhs.
- Small Enterprises:
- Manufacturing Enterprises: Investment in plant and machinery or equipment between INR 25 lakhs and INR 5 crores.
- Service Enterprises: Investment in equipment between INR 10 lakhs and INR 2 crores.
- Medium Enterprises:
- Manufacturing Enterprises: Investment in plant and machinery or equipment between INR 5 crores and INR 10 crores.
- Service Enterprises: Investment in equipment between INR 2 crores and INR 5 crores.
Please note that the turnover-based definition came into effect in July 2020. Under this definition, businesses could qualify as micro, small, or medium enterprises based on their annual turnover rather than just their investment in plant and machinery or equipment. The turnover thresholds were as follows:
- Micro Enterprises: Annual turnover does not exceed INR 5 crores.
- Small Enterprises: Annual turnover is more than INR 5 crores but does not exceed INR 75 crores.
- Medium Enterprises: Annual turnover is more than INR 75 crores but does not exceed INR 250 crores.
These definitions were introduced to promote ease of doing business, boost entrepreneurship, and enable MSMEs to access various government schemes and benefits more effectively. However, these definitions may have been updated or modified since my last knowledge update in September 2021. Therefore
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